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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Dec. 4, 1986)
Thursday, December 4, 1986/The Battalion/Page 9 World and Nation hief economist: new budget will cause pain ILD CU!! whati S ; said irld fori can ili bile toiii WASHINGTON (AP) — Presi- ent Reagan’s Cabinet was pre- ented Wednesday with the first $1 rillion spending outline in history, a iscal 1988 budget proposal that the resident’s chief economist says will e “accompanied with a lot of pain.” Chairman of the president’s Council of Economic Advisers, Beryl prinkel said, the pain will come in he form of more than $50 billion in pending cuts and other savings de igned to meet the $108 billion defi- it target set by the Gramm-Rudman judget balancing law. “There is no way to cut back or ven restrain spending that doesn’t create problems in the various de triments,” Sprinkel told a confer- [ence sponsored by the conservative American Enterprise Institute. Federal agency heads got their first look at the new budget propo- al, the first installment of which will be submitted to Congress on Jan. 5, at Wednesday’s Cabinet meeting. Presidntial spokesman Larry Speakes said, the presentation was accompanied by a strong pitch by Reagan to go along with the deep spending cuts needed to meet the Gramm-Rudman deficit target. OMB spokesman Edwin Dale said more detailed information on indi vidual cuts recommended by the president’s Office of Management and Budget was being sent to each federal agency. Deficit-reduction steps proposed by OMB Director James C. Miller III go far beyond the spending cuts Cabinet members had recom mended for their own agencies, according to administration officials who spoke on the condition of ano nymity. Even the departments of Educa tion and Energy — the only two fed eral agencies to submit preliminary budget recpiests that came in under White House guidelines — were told to pare back their programs f urther, the officials said. With a month to go before the president’s budget is put in final form, the broad outlines of the spending plan for the fiscal year that begins next Oct. 1 were beginning to take shape. T hey showed: • An overall budget document citing anticipated revenues of ap proximately $900 billion and outlays a shade over the $1 trillion mark, but less than $1.1 trillion. • Roughly $25 billion in spend ing cuts and program eliminations and another $25 billion in proposed new user fees and the sale of federal assets, including loan portfolios. • A dramatic overhaul of the gov ernment’s credit programs, where new loans would be sold to private investors soon after they were made and where private insurance would be purchased to back up govern ment loan guarantees. • Another attempt at dropping most of the 40 programs the admin istration has sought to eliminate, un successfully, in previous budget plans. However, two former entries on Reagan’s hit list — Amtrak subsi dies and the Small Business Admin istration — would be spared imme diate extinction, although financed at far lower levels. • A proposed increase in defense spending of about 6 percent —made up of 3 percent in “real” increases on top of projected 3 percent inflation — to a spending level of $308 billion. • No higher taxes and no de crease in Social Security benefits. note lit ; | iparltw i the a# I (’.ahfi j vilha | :a-An» taid f work pari kes at 3f Louisiana sheriff withdraws order to stop blacks GRETNA La. (AP) — Under rebuke, a sheriff today canceled his order that deputies routinely stop and question blacks found in white neighborhoods. Jefferson Parish Sherif f Harry Lee opened a news conference by apologizing to black people and anyone else he may have of fended. In announcing plans Tuesday for a holiday crackdown on bur glaries, he had remarked that blacks in mostly white neighbor hoods are likely “up to no good.” Lee said deputies in his subur ban New Orleans parish would continue to stop anyone they might reasonably suspect of hav ing committed a crime. Then, he answered ci itics who had called him a racist, saying he has been involved in the civil- rights struggle for 20 years. Lee, a Chinese-American, said,“I am a minority and I know intimately what prejudice is, hav ing been a victim of it for most of my life, and it distresses me greatly that I have been charac terized as a bigot and a racist be cause I know in my own heart how it feels to be treated differ ently.” He said he was credited with working toward the peaceful inte gration of New Orleans restau rants more than 20 years ago. As a federal magistrate, he said, he recommended relief in more civil rights cases than any other magistrate in the nation. Martha Kegel, executive direc tor of the Louisiana branch of the American Civil Liberties Union, had earlier called for Lee’s resig nation, calling him “a despicable bigot.” Lee had drawn fire after his Tuesday news conference for re marks such as, “If you live in a predominantly white neighbor hood and two blacks are in a car behind you, there’s a pretty good chance they’re up to no good.” Pickens launches bid to take over Shamrock Corp. DALLAS (AP) — Amarillo oilman T. Boone Pickens on Wednesday launched a $2 billion takeover bid for Diamond Shamrock Corp., and some analysts predicted the giant en ergy company would reject the of fer. A partnership led by Pickens’ Mesa Limited Partnership and in cluding construction magnate John M. Harbert III of Birmingham, Ala., offered in a Securities and Exchange Commission filing to swap one Mesa Limited share for each Diamond Shamrock share, said David Bat- chelder, president of Mesa Petro leum Co. In New York Stock Exchange composite trading, Mesa Limited’s stock closed at $17, up 12.5 cents from Tuesday’s close. Diamond Shamrock closed at $14.62‘A, up $ 1.62 Va from Tuesday. Ginger Shearburn, a Diamond Shamrock spokeswoman, said she didn’t know what action the com pany would take or whether a board meeting had been set to review the proposal. Don Bustos, an industry analyst with Duff & Phelps in Chicago, said, “My guess is that they will reject the offer. “Then it boils down to how se rious is Mr. Pickens. My guess is he’s very serious. Then it comes down to what resources does Diamond Shamrock have to offer, to which I don’t have an answer.” Bustos called Picken’s offer fair. Batchelder said Wednesday Mesa wants Diamond Shamrock for its do mestic gas reserves. “Half are in the west Panhandle field,” he said, citing Mesa’s June ac quisition of Pioneer Corp. in Am arillo, which also has Panhandle re serves. Batchelder said Mesa has received no response yet from Diamond Shamrock but that the company had only received copies of the proposal Wednesday morning. Batchelder also said that the only assets Mesa would sell if it acquires the Dallas company is the coal opera tion, which Diamond Shamrock has had on the block for some time. Batchelder said Harbert Corp. and Mesa Limited already own 5 million shares of Diamond Sham rock, or about 4.5 percent. Harbert, a multimillionaire and cited as one of America’s richest men by Forbes Magazine, profited from an earlier partnership with Pickens when the two teamed up in an un successful bid for Gulf Corp. in 1984. Alan Edgar, an oil analyst with Schneider Burnet & Hickman in Dallas, had speculated earlier that Pickens might be after Diamond Shamrock for cash and is “picking on a company that has no credibility on Wall Street.” “This could set the stage to lever age him into a bigger deal soon.” But Bustos disputed that, saying he doesn’t think Diamond Shamrock still has available much of the $700 million in cash it received when it sold its chemical company earlier this year. He speculated that the cash might have been committed for debt pay ments and other items. Although Bustos said he believed Mesa’s offer was fair, he said, “I think Mr. (William) Bricker is intent upon maintaining the independence of Diamond Shamrock. That would also, of course, exclude a white knight.” Bricker is Diamond Shamrock’s president and chief executive offi cer. Diamond Shamrock, which posted a $604.7 million loss for 1985, has spent the past year re structuring. 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