Thursday, December 4, 1986/The Battalion/Page 9
World and Nation
hief economist: new
budget will cause pain
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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.
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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.
The company is now in a better
position to be profitable and now has
a more liquid balance sheet, analysts
say.
Bobbi’s Books ^
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Holiday Game Sale!!
December 1-24
all games ^ „
& supplies 20%
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Fri-Sat 10-9
Sun 1-8
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29
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• Complete Family Dental Care • On Shuttle Bus Route
mm w (Anderson Bus)
CarePlusN>
MEDICAL/DENTAL CENTER
696-9578
Dan Lawson, D.D.S. 1712 S.W. Parkway M-F 10 a.m.-8 p.m
(across from Kroger Center) Sat. 9 a.m.-l p.m.
Barett Shoes
Everything a mall shoe store has,
except high prices.
Spectacular Shoe Sale!
A fabulous collection of women’s
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-including MANY FAMOUS NAME BRANDS
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College Station 693-4423
Master Card, Visa or Choice. Open evenings and open Sunday 12:30 to 6 p.m.
SAVE 20% to 50% On
* Ladies & Mens
* Watches Diamond & Colored
Stone Rings
Diamond * Pendants &
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693-0677
IffSYSTEMS INC
-and-
PARTY PICS
CHRISTMAS SPECIAL
P osters $15 .00 re g, S 1 9. " (no minimum)
8x10 party pics $4.”" (minimum of 3,
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t Reorder any pictures from all party t front 1985 and 1986!
Call for Location -
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Also, BONFIRE pictures available! ^
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