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October 22, 1997 - Image 2

Resource type:
The Michigan Daily, 1997-10-22

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2 - The Michigan Daily - Wednesday, October 22, 1997
White House,
Congress agree
on IRS proposal


Trade deficit soars to seven-month high
WASHINGTON - America's monthly trade deficit ballooned to $10.4 billion as
imports of toys and Christmas decorations pushed the trade gap with China to an
all-time high just before the U.S.-China summit.
The widening deficit in August reported yesterday was the worst showing in
seven months and came at an inopportune time for President Clinton, who is try-
ing to sell a reluctant Congress on the virtues of free trade while also preparing for
the state visit next week of Chinese President Jiang Zemin.
The administration hopes the summit will showcase closer ties between the*
The U.S. appetite for imports from all countries hit a new record in August..On
the export side, sales of commercial jetliners, normally a bright spot in the trade
picture, fell by $888 million from July.
While emphasizing progress with China on a number of issues, Commerce
Secretary William Daley said China's continued refusal to open its huge market to
more American goods remained a "major concern" and would be a key topic dur-
ing the summit.
"Our exports (to China) just aren't growing at the rate they should," Daley tpld
reporters at a briefing on the trade figures. "That will not continue without there
being a political reaction. And we've tried to stress this repeatedly." ,

, Proposal would create
oversight board, give
taxpayers new rights
The Washington Post
WASHINGTON - The Clinton
administration yesterday abandoned its
opposition to a congressional plan for a
wide-ranging overhaul of the Internal
Revenue Service, clearing the way for
the proposal to become law as early as
next spring.
The latest version of the proposal,
unveiled yesterday by House Ways
and Means Committee Chair Bill
Archer (R-Texas) "is now on balance
a workable plan and one that we can
support," Treasury Secretary Robert
Rubin said.-
Archer's committee is expected to
approve the plan today. House and
Senate leaders said they anticipate easy
Although congressional Republicans
were crowing about the White House
reversal, Clinton administration offi-
cials clearly hoped the agreement
would defuse a potentially damaging
issue in next year's mid-term congres-
sional elections.
The plan, which has been the focus of
a months-long battle between the
administration and Congress, would
create an oversight board made up of
government officials and private sector
experts to review and approve the

agency's operations, long-term strategic
plans and budget requests.
It would also give taxpayers a variety
of new rights when dealing with the
IRS and would shift the burden of proof
from the taxpayer to the agency when
disputes reach the courts.
The measure would affect taxpayers
directly in several ways: it would make
it easier for taxpayers to recover costs
and damages when the IRS pursues
them wrongly; it would make it easier
for innocent spouses to obtain relief
for tax liabilities created secretly by a
spouse or ex-spouse; and it would
extend the attorney-client confiden-
tiality privilege to accountants and oth-
ers authorized to practice before the
The proposal grew out of recom-
mendations made by a commission,
created by Congress, which spent
more than a year studying the IRS in
the wake of revelations about the
agency's disastrous attempts to mod-
ernize its computers and other internal
For months, the Clinton administra-
tion had strongly opposed certain
aspects of the proposal, particularly
the oversight board. Treasury
Department officials called the board
unworkable, and fraught with potential
conflicts of interest by board members
who might have personal tax agendas
or links to large corporations with
important tax interests. The White

Treasury Secretary Robert Rubin announced on Capitol Hill yesterday that the
Clinton administration would endorse a House bill aimed at restructuring the IRS.

House also objected to the original
bill's proposal to strip the president of
the power to hire and fire the IRS com-
missioner and give that authority to the
new board.
But White House officials said yes-
terday that last-minute changes, includ-
ing preservationy of the president's
appointment power, had made the bill
palatable, though they vowed to contin-
ue to work for "improvements."
At the same time, political strate-
gists noted that recent Senate Finance
Committee hearings on IRS abuses
had tapped into a flood of public
resentment about the agency, and that
continued administration resistance
played into the hands of the
Republicans politically.
The White House reversal came after

administration officials sensed they
were losing the debate and Clinton per-
sonally consulted with Sen. Bob Kerrey
(D-Neb.), a co-chair of the commission,
to try to find a way out of the political
The official acknowledged that the
Republican attacks on the IRS had
uncovered legitimate problems that
need addressing. "If you scrape away
the barnacles of a crusted bureaucracy,
you find out the (problems look) pretty
much the same whether the
Republicans are running it or whether
we're running it," he said.
But in compromising, the White
House hoped to shift the debate away
from IRS management. "Then you can
have a general global debate on tax
reform." the official said.

Breakthrough points
to electric cars
WASHINGTON - Researchers
claimed a breakthrough yesterday they
said could lead to virtually pollution-free
electric cars that drivers could refuel at
the corner gas station. No need anymore
for big, range-limiting batteries.
The power process, using a fuel cell
and hydrogen extracted from gasoline,
is the latest in a string of technology
advances that have surfaced in recent
months, all aimed at building cleaner,
more efficient car engines.
In this version, a team of researchers
at Arthur D. Little Co., a Boston-based
energy consulting firm, came up with a
fuel cell that produces energy by com-
bining oxygen and hydrogen from
The company said it would work
with major automakers to develop the
idea and estimated there could be com-
mercial production of cars using the
technology as early as 2005.
The fuel cell could produce cars that
get up to 80 miles per gallon while cut-

ting air pollution by 95 percent, one
company official said.
And Honda Motor Co. said'this
week it has a gasoline engine thatcan
compete with'the electrics and cut pol-
lution to nearly zero by using addition-
al, newly designed catalytic converters.
Quayle sets sights
on presidency
BIRMINGHAM, Ala. -- Plenty of
politicians are suddenly itching to Qver-
haul the Internal Revenue Service. But
Dan Quayle was for tax reform before
tax reform was cool, as he is reminding
audiences around the country these days.
Five years after he and President Ekgbh
were turned out of office, Quayle is c
ing back. He makes no real effort to--
guise what he's unofficially launched: an
all-out try for the presidency. ,
"I'm clearly thinking about it,"Quayle
repeats, with a grin, as he races from
appearance to appearance, picking up
IOUs from local Republican candidates
and recruiting donors for his fledgling
political operation.

Downsizing on the
decline, jobs up at
many companies


AROU1D THE:~~;xx:< x- -

But 13 percent of
1,200 companies are
firing workers
NEW YORK (AP) - After years of
widespread layoffs, downsizing and job
cuts are at their lowest levels this
decade, with companies once again hir-
ing, according to a nationwide survey
released yesterday.
That's not to say all jobs are safe.,
Thirteen percent of the 1,200 compa-
nies surveyed by the American
Management Association are firing
workers, and a third of companies are
both firing and hiring.
Underscoring the fact that downsiz-
ings are hardly a thing of the past,
Citicorp announced yesterday it is
eliminating 7,500 jobs worldwide over
the next 18 months to become more
Still, the specter of downsizing is
receding. Those companies surveyed
created an average of 110 new jobs
while eliminating 57 in the year ending
in June, while their payrolls grew 6.9
percent in same period.
"We had to go through a long dark
night where there was an emphasis
on cost-control, cost-reduction and
staff-reduction," said Eric Rolfe
Greenberg, director of management
studies at the New York-based associ-
ation. "Ultimately, companies found

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that there was more to doing business
than cutting costs."
The sweeping job cuts of recent years
left few workers unaffected. Nearly 40
percent of companies cut jobs in three
or more years since 1990, according to
the survey.
The changes left even surviving
workers with a sense of insecurity - as
well as mounting work loads. But
things are looking up.
Companies reporting job cuts
have shrunk to 41 percent this year
from 56 percent in 1991, the man-
agement association reported.
Companies that downsized - or
decreased their total work force -
fell to 19 percent from 43 percent in
the same periods.
Some of the same forces spurring job
cuts - re-engineering and automation
- now are causing hiring, Greenberg
noted. For instance, while a new
automation system may have prompted
the layoffs of less-skilled workers ini-
tially, the wider use of automation now
demands the hiring of workers with
more skills.
Technical advances have prompted
Xerox, for example, to add 4,000 jobs
in the last two years, after cutting
12,000 jobs from 1993 to 1995 from a
work force of 97,000.
Nationwide, 32 percent of jobs cut
in the past year were managers and
supervisors, while only 14 percent
were professionals and technicians,
according to the survey, which
focused on companies with revenues
of $10 million or more. It had a mar-
gin of error of plus or minus 3.5 per-
centage points.
Even companies that have been in the
headlines with announcements of job
cuts are still quietly hiring.
AT&T, a company practically
synonymous with downsizing after
its job cuts of the 1990s, has hired
3,000 workers since the end of

Russians teens rank
criminal career high
MOSCOW - The counterrevolu-
tion is complete.
Russian teen-agers polled about their
career preferences before the collapse
of the Soviet Union six years ago prob-
ably would have chosen such patriotic
jobs as engineers, soldiers and cosmo-
Today they want to be in business as
accountants and lawyers and entrepre-
neurs. More of them want to be gang-
sters and racketeers rather than soldiers
and cosmonauts.
The All-Russia Center for Public
Opinion Studies recently asked 1,000
Moscow high school students, aged
about 14 to 17, a revealing question:
"What profession do you think is most
While making money was clearly
important to the new post-Soviet gener-
ation -- accountant was in first place,
followed by lawyer, banker and busi-
nessman -- killer and racketeer were
number 18 out of a list of 36.
Cosmonaut was in last place in the

poll, tied with driver and just below
clergyman. Only 0.1 percent of,:the
respondents thought being a cosmo-
naut was prestigious - or wanted t6 be
one. The three top professions were
mentioned by about 20 percent of*
respondents. !
Cages filed in
nursing home killings
Neighbors of the modern nursing home
in downtown Copenhagen considered it
an example of the Danish state's humahe
and high-quality care for the elderly.
But behind the white-stucco facae,
a nurse was stealing from patients and
injecting some of them with a Mor-
phine-based drug, police said yest&r-
day. Twenty-two men and women-
ages 65 to 97 - died.
The nurse, 32, and a 50-year-tld
doctor have been charged in the deaths,
which have angered and frightened' a
country that prides itself on its culture
of kindliness.
- Compiled from Daily wire reports.

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