Russia lied to the International Monetary Fund. The country overestimated its currency reserves by $1 billion in 1996 while applying for support, and IMF money may have been used for profiteering. The IMF is considering lending Russia $4.5 billion more. The Washington Post suggested that the IMF won’t give up on Russia but that Congress may give up on the IMF.
The United States intercepted two Russian bombers over Iceland. Western officials were bewildered by Russia’s first probe of Western air defenses since the end of the Cold War. Moscow denied that the flights were unusual.
Israeli Prime Minister Ehud Barak formed a government. He is partnering with secular, ethnic, and religious parties that support the peace process. A Los Angeles Times editorial points out that the coalition members share little else.
A cable car crash killed 20 people in the French Alps. All were working at a space observatory. Authorities were unsure of the accident’s cause.
The Federal Reserve raised interest rates. The .25 percent hike is the first in two years. The ever-hawkish Fed warned of “the emergence, or the potential emergence, of inflationary forces that could undermine economic growth.” Inflation doves argued that the hike will cut jobs. The Washington Post approves, but William Greider argues in the Washington Post that the Fed is needlessly punishing the masses; instead, it should discipline only banks that lend promiscuously.
Congress limited Y2K liability. Potential plaintiffs must grant businesses 90 days for repairs before suing and will be able to collect only limited punitive damages. Spins: 1) The bill will save computer companies from financial ruin. 2) The bill will expose their clients to financial ruin. 3) It’s a slippery slope to leaving consumers unprotected in product liability cases.
Kurdish rebel Abdullah Ocalan was sentenced to death. A Turkish court found him guilty of treason for waging a bloody drive for Kurdish self-rule. But his execution may not win the requisite parliamentary approval, because Turkish politicians fear martyring him and sparking Kurdish unrest. (Listen to the chorus of pleas for leniency in ” International Papers.”)
Kosovo update: 1) Thousands of Serbs rallied for Slobodan Milosevic’s resignation. More protests are scheduled in coming weeks. 2) Ethnic Albanians continued to loot and torch Serb villages. Kosovar Serbs continued to flee. 3) Evidence that directly links Milosevic to Serb atrocities was found. The British paper the Observer unearthed a trove of documents that recount how Milosevic planned to systematically eliminate Kosovar Albanians.
President Clinton proposed using federal budget surpluses to shore up Medicare and Social Security. The larger-than-anticipated surplus would be used to cover prescription drugs for Medicare recipients and to partially fill the projected gap in Social Security coverage. House Republicans countered with a tax-cut plan. The Wall Street Journal forecasts that Clinton will partially yield to Republican calls. The Washington Post entreats Clinton to stand firm, warning readers not to believe in “an accounting mirage to finance a misshapen tax cut that the country can’t afford.”
President Clinton presented his plan for overhauling Medicare. His proposal introduces prescription drug coverage and eliminates payment for preventive services but aims to cut costs by stoking price competition among HMOs and requiring patients to chip in for some services. The New York Times deems the plan “sensible” and “prudent,” and a WashingtonPost editorial observes that Clinton deftly “changed the subject from the solvency of Medicare to its adequacy.” But the New Republic laments the plan’s “gross generational inequity” and instructs President Clinton to spend the money on education instead. A Post news analysis asks “whether Clinton can use his talent for political positioning to actually implement policy.”
HMOs will cut back treatments to the elderly. A survey reported that the industry will force Medicare recipients to chip in for treatment and may ditch 250,000 recipients outright. The HMOs contend the government doesn’t contribute enough to allow them to provide adequate care. Patient advocates argue that HMOs can’t produce the lavish benefits they used to drum up business.
Physicians will unionize against managed care. The American Medical Association voted to form a union to negotiate for better wages and working conditions but promised never to strike. Spins: 1) Collective bargaining will win doctors more control over the type and quantity of medication they prescribe, resulting in better care for patients. 2) Collective bargaining will win doctors higher pay, resulting in higher costs for patients. (Read William Saletan’s “Frame Game” to see how the doctors cultivated their common touch.)
The independent counsel statute expired. The power to initiate investigations will once again reside with the attorney general. The Washington Post warned that the law may be resurrected “the next time Congress becomes dissatisfied with the way the Justice Department conducts a politically charged investigation” and urges that it be replaced with a rule “that would give the attorney general wide discretion on when to seek an independent counsel and some say in who that investigator is.”
Webster Hubbell will plead guilty. In return for Hubbell’s confession that he covered up his and Hillary Clinton’s role in a crooked Arkansas land deal, Kenneth Starr’s office will recommend that Hubbell not return to prison. Hillary Clinton had been named a potential witness in the trial. Click here for Robert Novak’s explanation in the Chicago Sun-Times of why legal woes could still cloud her Senate run.
George W. Bush broke fund-raising records. He has raised more than $36 million. Al Gore has almost $18.5 million and Bill Bradley $11 million. The Washington Post recounts the unanimous spin from Gore, Steve Forbes, and others who intimate that Bush will be beholden to his donors.
The Supreme Court barred lawsuits against states for violating federal laws. Individual plaintiffs will no longer be able to sue states that violate federal laws; only the federal government may do so. Observers called this a coup for the court’s Reagan- and Bush-appointed states’ rights faction. Liberals protested that the ruling emasculates Congress’ power to bind states to federal law. Law Professor Erwin Chemerinsky opines in the Los Angeles Times that the decision is “the height of conservative judicial activism” because it “invented new rights for state governments at the expense of individuals.” But David Ignatius tellsWashington Post readers that the court “is only ratifying a power shift that has already taken place” from the bloated and hamstrung federal system to the more effective state level.
The Securities and Exchange Commission is investigating Microsoft. The company is accused of failing to disclose all its cash reserves in order to smooth out fluctuations in its earnings. The SEC strongly prefers full disclosure of cash flow. The Wall Street Journal dismisses the seriousness of the investigation but calls it “one more headache for Microsoft.”
Starbucks profits dipped. The coffee business is fine, but earnings were sapped by investments in online ventures, including a retail store and an magazine. CEO Howard Schulz’s spin: “We are not just another company adding a ‘dot com’ to our name.” The Wall Street Journal’s retort: “Earth to Howard Schultz: Return from cyberspace. Your coffee needs you.”
Timothy Leary was an FBI informer. Newly available records show that he ratted on a radical leftist group in 1974 in an attempt to reduce his prison sentence. The documents were published by The Smoking Gun.
A headmaster staged a false boycott of the sitcom The Family Guy. The Rev. Richardson Schell deluged advertisers with letters from a fake group, leading some to cancel potential spots. The show was created by one of Schell’s former pupils, who gave some of its characters the surname of Schell’s former assistant. Schell said he was irked first by the name and then by “obnoxious, objectionable” content such as presidential, urination, and flatulence jokes. Fox rejoined that “an irreverent comedy that can’t raise a clergyman’s eyebrows isn’t doing its job.”
The San Antonio Spurs beat the New York Knicks for the NBA title. The New York Post grew misty over the “playoff run that almost became the impossible dream,” but the San Antonio Express News crowed that “New York’s Cinderella story was little more than the final chapter in the Spurs’ own fairytale.”
The U.S. women’s soccer team advanced to the World Cup semifinals. Fans rejoiced at the team’s success. Oganizers rejoiced at the 600,000 tickets they have sold. Boston Globe columnist Alex Beam effuses that the team is “the most exciting professional sports franchise in the country.”