N AT I ON&VORLD
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THE BATTALION
Monday,jW
Economy’s strength
boosts U.S. revenues
WASHINGTON (AP) — Whether it’s cramming more
spending into the budget or easing voters' worries about
Social Security and Medicare solvency, politicians'jobs
are being made a whole lot easier by the blazing economy.
For reasons the experts have yet to fully grasp, the
economy is growing at breakneck speed, causing revenue
to cascade into federal coffers and budget surpluses to
swell. What once seemed unaffordable is now deliverable
for President Clinton and Congress, a delectable election-
year scenario for incumbents.
“It’s like a small business
man who wakes up and finds
he has more money in the cash
register than he ever thought
possible,” said Richard May, a
consultant and former Repub
lican staffdirector of the House
Budget Committee. “And he
not only doesn’t have to shut
the shop down, he's going to
make money.”
Want to boast to voters that
you will shrink the govern
ment's $3.6 trillion publicly
held debt by at least $1 trillion
over the next five years? A
GOP-written fiscal 2001 bud-
politicians are enjoying to high technology, the surging
stock market and other forces driving today’s economy.
Just last w'eek, the government said the economy grew
at a 7.3 percent annual rate for the last quarter of 1999, the
steepest jump in close to 16 years.
Thanks to the economy’s strength, federal revenues
have consistently and dramatically outpaced official ex
pectations in recent years, bringing with them the record
budget surpluses considered unattainable a few years ago.
When Republicans took
“It's like a small busi
nessman who wakes up
and finds he has more
money in the cash regis
ter than he ever
thought possible.”
— Richard May
consultant and former Republican staff
director of the House Budget Committee
get that Congress hopes to finish in two weeks and Clin
ton’s rival spending plan both make that once implausi
ble promise, and many expect them to deliver.
How about squeezing some extra money for defense
and farmers, and to battle drug producers in Colombia into
this year’s budget without tapping Social Security sur
pluses? That’s what a $13 billion measure passed by the
House last week would do, with billions of dollars to spare.
And how about reassuring Americans that Medicare
will have enough money until 2023, and that Social Se
curity won't run dry until 2037? That’s what trustees for
both programs reported last week, easing whatever polit
ical pressure lawmakers faced to shore up either one for
the retirement of the baby boom generation.
All this because, after three decades of annual budget
deficits, the government turned a $69 billion surplus in
1998. Projections are for grow'ing black ink for the next
decade and beyond.
Some credit for this has to go to savings enacted in the
1990 budget deal between President Bush and Congress,
and subsequent pacts between Clinton and lawmakers in
1993 and 1997.
But mostly, analysts credit the federal surpluses that
over Congress in January
1995, the nonpartisan Con
gressional Budget Office
projected a $253 billion fed
eral deficit for fiscal 1999,
with even deeper shortfalls
on the way. But when the
books closed Oct. 1 on fiscal
1999, there was a $124 bil
lion surplus — a $377 bil
lion improvement.
Surpluses are still grow
ing. Between January and
March, the Congressional
Budget Office raised its sur
plus projection for 2000 by $3
billion to $179 billion. Private
analysts say the figure could
hit $210 billion by year’s end.
Israeli vision of Palestinian
day, April 3,2001
RAMALLAH, West Bank (AP)
evitability of Palestinian statehood, a top Palestinian negotiator
said Sunday — but it envisions the state as unnatural “islands
in an Israeli ocean,” an outcome that would be unacceptable to
Palestinians.
Yasser Abed Rabbo, who is leading talks with Israelis in
Washington, said there has been little progress in bridging gaps
that led to a breakdown in negotiations in February. The re
newed U.S.-sponsored talks aim for an outline of a final agree
ment by May and a full-fledged agreement by September.
Abed Rabbo said Israel’s insistence on limited statehood, as
well as its refusal to accommodate Palestinian refugees, "is the
most dangerous issue we are facing.”
Israel has not formally proposed such a state, and Israeli
Cabinet Minister Haim Ramon described Abed Rabbo’s per
ception of Israel’s position as “extreme.”
Abed Rabbo said Israel had dropped its opposition to the
Palestinian state Yasser Arafat hopes to declare by September.
The problem, he said, is Israel’s vision of that state.
The West Bank would be divided into two clusters of land
connected by a passage. Along with some West Bank suburbs
^hey have no
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Israel accepts the in- of Jerusalem, the proposed state would cover about k r ey 0 n the weak-
state is found unacceptable
current West Bank.
Israel would control two Palestinian border crossitJ
Jordan, as it now controls the border crossing betweentfl
Strip and Fgypt. Large Jewish settlements wouldbecosf
by Israel, and Israel would also control security ontnajctl
Abed Rabbo said that proposal which hedescrikl
lands in an Israeli ocean" is unacceptable to Palestine^?"'
he repeated demands for the return of all Palestiniaii-:M 1Sl ! s ^'" C - in ^ X1 ,
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all
lands captured by Israel in the 1967 Mideast war.
Ramon, who is close to the negotiations, said the side
not so far !i ment on most issues,
“ \t the end we will reach an agreement \vith ttePaW™^' 01111 ^ t * 1
ans over a Palestinian si itc." Ramon said. "It will notkire' u ^h xt " l '' UISI1
that the Palestinians could not accept." B 8 - USC< J ^ ar deal
Ramon said Israel tees a Palestinian state withlimittiB 011 the inform
crcignty, especially o\ er security matters. pier this month t
He suggested postponing discussion of Jerusalem, c tent of Transporta
by both sides as their capital, for a few years inorderti
agreement on the other issues by September. Abed Rati
jected the idea.
iston-area sectn
npany’s “Ford 1
’’ was closed (
Is pending revi
ay it operates
Both parties have promised not to touch the part of the
surplus that comes from Social Security. CBO estimated
in March that this year’s non-Social Security surplus will
be $26 billion, which lawmakers feel free to use for high
er spending, cutting the gasoline tax or debt reduction.
But that figure should also grow, perhaps to $40 bil
lion. experts say.
So far, these non-Social Security surpluses have been
big enough to satisfy lawmakers’ urges to boost spending
and cut taxes without eroding Social Security funds.
But the money is not limitless.
Republicans omitted George W. Bush’s proposed five-
year, $483 billion tax cut from their budget, partly for fear
that the GOP presidential candidate’s plan would indeed
eat into Social Security money.
And to fit their tax and spending plans into next year’s
budget, both Clinton and the GOP are using accounting
gimmicks. Among other tricks, both would push a feder
al payday and scheduled payments to some defense con
tractors from the first days of fiscal 2001 into the last days
of fiscal 2000, freeing up $7 billion in next year’s budget.
But thanks to the economy, politicians’ toughest bud
get task these days is deciding which goodies to dis
pense to the public.
Ambush investigation pursuit
ussian defense minister
byRi
GOISKOYE, Russia (AP) — Russia’s de
fense minister on Sunday sharply criticized
the military command in Chechnya for an op
eration that left at least 43 Russian servicemen
dead after an ambush by Chechen rebels.
Defense Minister Igor Sergeyev, who was
observing military maneuvers in Tajikistan,
said there will be an inquiry to determine who
is to blame for the ambush and to what extent,
Interfax news agency reported.
“We are ready to expose these mistakes
since if problems and mistakes are not re
vealed, it will be impossible to eliminate
them,” Interfax quoted him as saying.
He blamed the “inadequately firm cen
tralized command and a lack of efficiency
among officials to cope with duties assigned
by the Interior and Defense Ministers” for the
debacle, according to Interfax.
Col. Ilya Lukin, deputy commander of
Russian forces in the Vedeno district of
Chechnya, told Interfax on Sunday that 37
soldiers from a unit ofOMON special troops
from an Interior Ministry' unit were killed in
Thursday’s ambush.
Six soldiers from a regular army unit
sent to help them following the attack also
died. At least 11 servicemen were still miss
ing Sunday.
The ambush was the latest in a series of at
tacks that inflicted heavy losses on the Rus
sians, showing their vulnerability to the rebels
despite their claims to have defeated the rebels
and restored federal ■ Lrel over Chechnya.
The defense minister said federal
forces have destroyed all major rebel
groups in Chechnya. “There are no large
pockets of resistance left in the republic,”
he said. “The militants have been scattered
in small groups.”
Speaking in an interview on the Itogi
weekly news program, Col. Gen. Gennady
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said the major error was to
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reconnaissance tor the attack. allowed to con
Rebel hands arc stepping up it ^ era i other metro]
paimi to sabotage Russian troops and San Franc
number of ambushes on motorize;®:
ian convoys is on the increase,tkr§|
command's press service toldITM
on Sunday.
There has been no let up in rebel
to infiltrate villages in southern®!
order to replenish dwindling food
the press service said.
Russian artillery has beem"?
bombarding rebel positions oventfi*
on Sunday around the southernvite
1 sa-Vedeno, Tangi-Chu and TseoteT -
terfax reported.
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