As the House Ways and Means panel took up legislation to cut taxes by $80 billion, the White House warned of a veto unless the Social Security system was solidified first. The proposed tax cut over five years would be funded almost entirely by a forecast of budget surpluses totalling $520 billion from 1999 to 2003, which was calculated by including Social Security funds.
Federal Reserve Chairman Alan Greenspan tried to reassure Congress that spreading economic turmoil will not derail the US economy. He laid to rest suggestions that a coordinated round of interest-rate cuts is imminent among major world powers, but left the door open for a unilateral cut in US rates. Economists said it is highly unlikely the Fed will cut rates at its next meeting Sept. 29 - but they called a rate reduction at scheduled Nov. 17 or Dec. 22 meetings a growing possibility.
The nation's trade deficit widened to $13.9 billion in July as the Asian currency crisis cut more deeply into farm and manufacturing sales overseas, the Commerce Department reported. Exports hit a 17-month low. The July deficit was 2.1 percent above June's imbalance of $13.6 billion. That made July the third-highest monthly deficit on record, surpassed only by May and April of this year.
Lower energy prices held inflation to a moderate gain in August, but prices of clothing and medical care were up, the Labor Department said. The Consumer Price Index rose by a seasonally adjusted 0.2 percent, the same as in July. The 0.2 percent increase was only slightly higher than a 0.1 percent rise forecast by US economists in a recent Reuters survey.
The House indicated it will not provide $18 billion for the International Monetary Fund - at least for now. GOP strategists said they may conditionally support full funding after a House-Senate conference panel is formed to reconcile rival versions of bills that would replenish IMF coffers depleted by the widening global crisis. That strategy would make IMF funding a potent GOP bargaining chip, analysts said.
GOP leaders in the House and Senate discussed up to $4 billion in aid to farmers, their first hint at the size of a possible US response to a sudden slump in crop prices and farm income. Lawmakers want to pass an aid package before Congress adjourns in early October. The Senate has twice rejected an administration proposal for more generous loans to farmers. Republicans prefer direct payments.
Banks are lowering commercial-lending standards even though risk of default is rising, The Washington Post reported, quoting a new study by the Office of the Comptroller of the Currency. The report, citing competitive pressures as the cause of a trend over the past four years, raised concern that US banks may have to deal with a wave of sour domestic loans over the next year to 18 months, the newspaper said.
Tobacco companies agreed to pay $1.7 billion more to Florida and accept new advertising restrictions as part of a renegotiated settlement of the state's 1997 landmark antismoking lawsuit. The new deal is designed to allow Florida to match more generous settlements reached by other states. After Florida reached its original $11 billion accord, Mississippi, Texas, and Minnesota also settled lawsuits against the industry to recoup the medical costs of treating smokers. A provision in the Florida agreement allows it to renegotiate if other states make better deals.
Railroad workers and truckers are forced to work dangerously long hours, a senior National Transportation Safety Board official told a Senate Commerce subcommittee. Research director Vernon Ellingstad said his agency was disappointed with government efforts to change regulations that allow locomotive engineers and truck drivers to work up to 432 hours and 260 hours a month, respectively - but limit commercial-airline pilots to 100 hours monthly.
Senior Western diplomats flew to Moscow to assess the new Russian government's plans for overcoming deep financial crisis, but were greeted by the news that President Yeltsin needed "an extra week" to finish assembling a Cabinet. One of the diplomats, German Foreign Minister Klaus Kinkel, expressed full confidence in the government's handling of the crisis. But a spokesman for US companies doing business in Russia said they had lost a half-billion dollars because of the crisis and needed proof that the government understood how deeply it had hurt them.
Japan's ruling and opposition parties were in a race against time to cobble together a compromise plan to fix the deeply troubled banking system before Prime Minister Keizo Obuchi leaves for the US Sunday. Obuchi is due to meet President Clinton Tuesday and hopes to have a plan in hand to clean up the system, which is laden with billions of dollars in bad debts. But as the politicians met, the key Nikkei Stock Average closed at a 12-year low, reflecting investor pessimism.
As Albania's parliament considered whether to lift ex-President Sali Berisha's immunity from arrest, he led another protest rally in the capital and some of his supporters were accused of attacking a bank and police station. Berisha followers triggered the second major crisis in Albania in 18 months by reacting violently to the murder last weekend of his close ally, Democratic Party chief Azem Hajdari. Berisha blamed Socialist Prime Minister Fatos Nano for ordering Hajdari's death, demanded Nano's resignation, and called a national protest for today. Nano has accused Berisha of plotting a coup.
Denials that they're holding back results of last weekend's elections in Bosnia were issued by the international monitors who supervised the voting. The Organization for Security and Cooperation in Europe (OSCE) said no outcomes had been made public because ballot-counting in some cases was only 40 percent complete, not because of a strong showing by extremist candidates. The OSCE dismissed claims that a hard-line candidate had defeated Serb sub-state President Biljana Plavsic, a moderate backed by the West.
Israel will confiscate more Palestinian land to build new housing near the West Bank site where two Jewish residents were shot to death last month, published reports said. Meanwhile, in disputed eastern Jerusalem, Jewish protesters were evicted from Har Homa, another site where such housing is scheduled to be built over Palestinian objections. The protesters, from a youth group, said they'd acted to force construction to begin.
A news conference in Madrid was to be held by senior Spanish government officials to respond publicly to the open-ended truce declared by the militant Basque separatist group, ETA. The cessation of 30 years of hostilities in which more than 800 people have died was to begin today, a published statement said. But it also made clear that ETA was not abandoning its goal of an independent state for the Basque region. And it warned that hostilities would resume in the event of a "confrontation with the government."
Changing the Constitution to abolish the post of armed forces chief was being considered by Congress in Honduras within hours after being proposed by President Carlos Flores Facusse. The move, which he said would strengthen civilian authority, is believed to have the support of current military commanders. Gen. Mario Hung Pacheco, who has held the job since 1996, is due to retire in January. The Army has toppled civilian presidents three times since 1956.
"We - all of us - believed in the reform process. And now it turns out we were wrong."
- American Chamber of Commerce/Moscow president Scott Blacklin, saying US companies lost $500 million over the summer because of the Russian economic crisis and have no confidence in the government there.
When Ross Jackson won more than $100,000 on a popular TV quiz show in England earlier this month, he could hardly contain his glee. Neither could his creditors. It seems Jackson owes almost a quarter of that amount to them. Hardly had he scooped up his prize as the cameras rolled than he was summoned to a court hearing so payment in full could be arranged.
Many Americans may have reservations about President Clinton, but a certain Israeli resort doesn't. Despite international coverage of his political difficulties, a four-star hotel in the Mediterranean seaside town of Netanya has added his name to its outdoor sign. Said an official of the newly redesignated 200-room Carmel Clinton: "He's the people's president. We don't look at the item of Monica."
The Day's List
Do Homers Seem More Routine? Well, They Are
With Mark McGwire and Sammy Sosa going head to head for baseball's home-run record, you may wonder whether the traditional four-bagger is less of a rarity than it once was. Of course, there are variables to consider, including the addition of two new teams to the major leagues in 1993 and again this year, and a strike-shortened 1994 season. Still, statistics indicate players are breaking into a home-run trot more often as seasons roll by. Total major-league homers for the past decade and each year's average per game (unofficially 2.07 so far this season):
Year Total HRs HRs/game
1988 3,180 1.51
1989 3,083 1.46
1990 3,317 1.58
1991 3,383 1.61
1992 3,038 1.44
1993 4,030 1.78
1994 3,306 2.07
1995 4,081 2.02
1996 4,962 2.19
1997 4,640 2.05
- 'Total Baseball IV: The Official Encyclopedia of Major League Baseball' - 'Sports Illustrated 1997 Sports Almanac' - 'Sports Illustrated 1998 Sports Almanac'