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During a break in a long day of negotiating between White House chief of staff Erskine Bowles and GOP leaders, Senate Majority Leader Trent Lott said a deal could be completed soon and a package sent to the Senate floor as early as tonight. House Speaker Newt Gingrich was predicting an agreement by tomorrow morning and House action later that day.
"The mood is such that everybody would like to reach agreement," Lott (R-Miss.) told reporters.
While agreeing that progress was being made, White House officials were less optimistic about an immediate breakthrough, saying that differences remained over education and other issues.
"It is premature to predict any immediate resolution," said Linda Ricci, spokesperson for the White House budget office.
While the bargaining proceeded, the House and Senate both agreed by voice vote to keep agencies operating through tomorrow night. A prior stopgap measure was expiring yesterday night, and both sides hoped the latest short-term bill - the third - would be the last.
President Clinton planned to sign the bill upon his return to the White House from a political fund-raising trip to New York.
Twelve days into fiscal 1999, spending bills controlling about $500 billion worth of spending - nearly one-third of the federal budget - were still in play.
The Clinton administration has been demanding about $3 billion more, including $1.1 billion for hiring elementary school teachers plus money for dealing with climate change, aid to Russia and other proposals.
Republicans had been offering nearly $2.5 billion, but with some different priorities. The GOP proposed $1.1 billion that states could use to hire teachers or take any other steps they wanted to reduce class size. The Republicans were offering half the $46 million Clinton wanted for food safety and none of the $100 million he wanted for toxic waste cleanups.
Lott said that on the highest-profile issue in the talks - Clinton's call for $1.1 billion for hiring 100,000 new teachers - he believed an agreement would be reached, though he said Republicans were continuing to press for local control on how the money would be spent.
But he said differences remained over a number of issues, needle distribution for drug users in the District of Columbia; a Republican push for anti-drug programs; overseas family planning aid; aid to North Korea and immigration.
Lott also said "a couple of words" stand in the way of agreement over Clinton's call for $18 billion for the International Monetary Fund. The two sides have generally agreed on conditions calling on the IMF to make its proceedings more open and to end its practice of below-market interest rate loans.
Just three weeks from Election Day, Clinton tried anew to keep his education demands in the public spotlight. Before leaving for New York, he prodded Republicans on an issue that polls show scores well for Democrats.
"I know there's an election coming, but members of Congress can return home to campaign knowing that they put progress ahead of partisanship on the important issue of education," Clinton said. "We need 21st century schools where teachers can teach and students can learn."
"It's time for us to put progress ahead of polling," Lott fired back.
The White House and Republicans were also working toward agreement on a multi-billion package of so-called emergency spending.
Clinton has proposed about $12 billion for modernizing federal computers, for farm aid, for supporting U.S. peacekeeping troops in Bosnia and for other proposals. Republicans have sought about $7 billion for defense needs, including $1 billion for anti-missile defenses and $1.5 billion for intelligence.
The two sides were also divided over scores of policy issues ranging from the use of statistical sampling for the 2000 census to whether taxpayer-financed needles should be distributed to drug users in the District of Columbia.
Other than approving the stopgaending bill, the Senate spent a rare Columbus Day session with its members listening to each other give speeches.
The House also planned to vote on a GOP bill renewing several expiring business tax credits, costing $9.2 billion over 10 years.
The bill's fate was complicated with a last-minute White House proposal to add its own ideas. These included an increase in the tax corporations pay to help finance Superfund hazardous waste cleanups and a $7.9 billion, 10-year program aimed at triggering $21.8 billion in new bond authority for school projects in 1999-2000.
The House also planned to vote on bills that would:
-Impose new and tougher penalties on pedophiles who find victims on the Internet.
-Make it illegal for telephone companies to switch a customer's long-distance service without a subscriber's permission.
-Implement the Chemical Weapons Convention treaty, which bans use, development, production or stockpiling of chemical warfare agents and requires the destruction of existing stockpiles.
David Boone allegedly volunteered his spying services to Moscow. While assigned to the U.S. National Security Agency, he walked into the Soviet Embassy in Washington, where he sold his first classified document for only $300.
At the time, Boone was under "severe financial and personal difficulties," according to an FBI counterintelligence agent's affidavit. His estranged wife was garnishing his Army sergeant's pay and furnishing him with only $250 a month, the affidavit said.
Boone, who was charged with conducting most of his espionage after being transferred as a code analyst to an Army facility in Augsburg, Germany, was paid just slightly over $60,000 for the documents he provided to the Soviets.
But John Martin, former chief of the Justice Department's internal security section, said the small amount should not be read as an indicator of the true value of what Boone turned over.
He cited the 1978 case of a CIA clerk who sold the Soviets a manual on a supersecret U.S. spy satellite for just $3,000.
The paltry sum "is not unusual at all," Martin said. "It tells you how cheaply people will sell out."
It was not clear from court filings what led the FBI and Army intelligence officials to approach Boone, who left the Army in 1991 and had married a German national and worked for German computer companies.
Boone was arrested Saturday in an FBI sting operation after flying to Washington from his German residence to meet with his new "handler" for the SVRR, the KGB's successor.
But the handler, who had paid him $9,000 in U.S. currency, turned out to be an FBI operative who had contacted Boone and enlisted his espionage services for the Russian agency.
When asked to renew his spying activities, Boone allegedly responded, "I'm at your disposal," according to an affidavit filed with the court by FBI special agent Stephanie Douglas.
During a five-minute court hearing Tuesday in nearby Alexandria, Va., Boone said he understood the severity of the charges against him. He responded "I do" and "yes, sir" to questions from Magistrate Welton C. Sewell.
Assistant U.S. Attorney Thomas Connolly told the court that if convicted, Boone could face a maximum punishment of life in prison and a $250,000 fine or, depending upon the gravity of his acts, the death penalty.
The death penalty could be imposed, Connolly said, if Boone were shown to have seriously compromised the nation's early warning system for nuclear attack, passed critical data about a major U.S. weapons system, or if his actions resulted in the death of any U.S. agent.
Because Boone agreed to waive his right to preliminary and detention hearings, Sewell ordered him held without bond in the custody of U.S. marshals pending formal indictment by a federal grand jury within 30 days.
(Optional add end)
The FBI affidavit noted that in June 1990, during a security clearance background investigation, Boone acknowledged being deeply in debt, a situation he claimed to have created purposely to cut off payments to his ex-wife. But this behavior led the Army to suspend Boone's access to classified information and reassign him as sergeant of the guard at a U.S. military hospital in Augsburg. He retired a year later.
The FBI operative first contacted Boone by phone on Sept. 5, indicating that he was with the KGB-SVRR. He arranged to meet Boone in London to discuss espionage proposals Boone had made earlier to his first Soviet handler, identified only as "Igor."
In his meetings with the undercover FBI operative, Boone explained how and why he volunteered to spy for the Soviets. Those specific details were cited by the FBI as grounds for Boone's arrest and search warrants in the FBI affidavit.
Boone told of being provided with a wig and mustache to use as a disguise when he returned for his second meeting with the Soviets, and of being driven out of their embassy in a closed van to escape surveillance.
The affidavit directly quoted Boone _ indicating he had been recorded _ as telling the undercover operative that he approached the Soviets because: "I needed money. Plus, well, plus I was extremely angry."
NewsCom10/13/98 06:13:53 PM
With the downturn in the stock market, Merrill Lynch and other financial services companies that had been seeing years of solid growth reported a drop in earnings yesterday.
"This is only the beginning for Merrill Lynch and others in the industry," said Michael Flanagan, an analyst at Financial Service Analytics in Port Washington, Pa.
"This is a dose of reality that the tide has turned on Wall Street."
Merrill Lynch, the leading U.S. brokerage, reported a $164 million loss for the third quarter, compared with earnings of $502 million for the same period of 1997 and $551 million in the second quarter of 1998.
The cuts represent 5.2 percent of Merrill Lynch's workforce and will be made worldwide through layoffs and attrition, the company said. Officials would not say whether stockbrokers or clerical workers will bear the brunt.
An additional 900 jobs held by outside consultants working on mostly technological projects will also be eliminated.
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Around the World
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Strikers threw stones and police replied with a water cannon and nightsticks, trying to clear protesters from areas around public buildings. Tensions are expected to escalate today, when protesters plan to occupy the city's main plaza.
The government insists that the measures the unions are protesting - including tax and budget changes and the divestiture of state-owned companies - are needed to strengthen Colombia's economy to confront the spreading global crisis.
Many analysts believe that Colombia would be especially vulnerable to an attack on its currency as the economic malaise that has swept Asia and Russia infects Latin America. The peso was already devalued 23 percent last month.
The prices of Colombia's major export commodities - oil, coffee and coal - have tumbled, and lending from abroad to cover the national budget deficit has left the economy weak. Nevertheless, the 850,000 members of public employee unions oppose the reforms.
They are also decrying a proposal for a 14 percent pay raise, which would be less the 15 percent inflation projected for this year.
"This is generating a process of unemployment and misery," said Tarsisio Mora, strike coordinator and head of the 280,000-member national teachers union. To make their point, strikers have clogged downtown traffic with marches for the past week. Today, Mora said, they plan "to take Bogota" - or, more specifically, the capital's historic Bolivar Plaza.
The administration of President Andres Pastrana, which took office in August, insists that all the measures are essential to saving an economy battered by four years of government overspending and threatened by the spreading international economic crisis.
Pastrana's predecessor, Ernesto Samper, propped up his beleaguered presidency with concessions to public employees. As a result, many of the free-market reforms undertaken throughout Latin America were stalled in Colombia and the national budget deficit grew.
Now members of Pastrana's economic team say they must take on the unpleasant tasks that Samper shirked.
Among the most controversial proposals is a plan to lower the value-added tax to 15 percent from 16 percent, while expanding the range of taxable items to include processed food, such as canned goods. In addition, the government says it will continue selling off banks and other enterprises.
Public employee unions in other countries have unsuccessfully tried to halt similar reforms by their governments, managing at most to delay sales and other measures. Mora said his union will succeed because "we have the arguments to prove that this is negative for the government and society."
Nevertheless, some employees defected from the strike after a Labor Ministry ruling that the telephone company workers and employees of government-owned banks could not legally participate.
Bank workers slipped into their offices under police escort at dawn yesterday, without incident, but were trapped inside, not sure how they would leave as angry strikers gathered outside.
Protesters began throwing stones when they noticed telephone company employees going to work.
This is not the only area that has seen such violence. This month, in the heartland province of Guateng, four men were arrested after the house of Nokonleko Shingane, another alleged witch, was set afire. Phumele Ntombele-Nzimande of the Commission on Gender Equality said the violence associated with witch hunts has become "a national scourge."
A five-day conference of government and social agencies held last week in Thohoyandou, capital of Northern Province, called for a national educational campaign to counter popular superstition.
The conference rejected outlawing witchcraft, which has millions of followers in South Africa. It favored tolerating the belief, or superstition, but not allowing it to impinge on the basic rights of others.
"In this new South Africa, there is no need seriously for a law to suppress witchcraft," said Barney Pityana of the South African Human Rights Commission. "We need to say to our people, 'You are free to practice and belong, but you are not free to violate someone else's rights.' "
10-14-98
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