Banner Graphic, Volume 13, Number 100, Greencastle, Putnam County, 4 January 1983 — Page 2
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The Putnam County Banner-Graphic, January 4,1983
Reagan seeks S3O billion domestic cut
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PRESIDENT REAGAN Battling budget
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WASHINGTON (APi - President Reagan plans to seek S3O billion in domestic budget cuts for fiscal 1984 but he still faces a deficit likely to top $175 billion, administration officials report. Any further narrowing of the estimated red ink for the budget year that begins next October depends on whether the president will drop his opposition to new tax increases and further cuts in his military spending plans, according to officials involved in planning the budget. The officials, speaking on condition that their names not be used, disclosed the proposed
non-defense cuts Monday as Reagan launched a week of intensive meetings with aides and congressional Republicans on ways to stem a deficit that swells with each new estimate. Administration budget planners now concede the 1984 deficit will exceed S2OO billion for the first time if no savings are enacted. Just a few weeks earlier, the administration was talking about a deficit between $l5O billion and S2OO billion, and last summer, it was predicting a deficit of $93 billion. When he took office, Reagan promised to eliminate the deficit by 1984. Instead, he is presiding over the largest
Economy takes priority
WASHINGTON (AP) - The search for solutions to the soaring unemployment and swollen federal deficits will dominate the new 98th Congress where Democratic House leaders have gained more power to control what aiie s i e i a ee aalthough the economy is the No. 1 priority, other difficult problems many lingering from last year still must be solved. The unfinished work includes propping up the Social Security system, setting new air pollution standards, investigating natural gas pricing, and adjusting farm support payments. Congress convened Monday to begin a two-year session. The opening was mostly ceremonial, with little real work scheduled until after President Reagan makes his State of the Union address Jan. 25. But Democratic House leaders succeeded in getting the House to approve several rules changes. Democrats ,§l§o removed
Take politics out of MX issue: Reagan
WASHINGTON (AP) - By appointing a bipartisan commission to study the MX missile, President Reagan is trying to take the issue oufjof the political arena to improve the weapon’s chances of survival, administration officials say. “The president is interested in getting a consensus and congressional approval for a basing mode for the MX, rather than re-fighting the 1980 campaign,” said one official who
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deficits ever: $110.7 billion in fiscal 1982 and an estimated $lB5 billion or more this year. The previous record was $66.4 billion in 1976. The latest red-ink estimate stems from a new internal administration forecast showing weaker economic growth for 1983 than previously expected. Reagan faces a Jan. 31 deadline , for sending his proposed budget to Congress, which may prefer defense cuts and tax increases to further cuts in the same domestic programs it trimmed in 1981 and again in 1982 at the president’s urging. The S3O billion in non-military
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Rep. Phil Gramm, D-Texas, from the Budget Committee. Gramm was one of the so-called “801 l Weevils,” a group of Southern Democrats who frequently supported the Reagan administration’s economic policies. In preparing for business ahead, congressional leaders quickly made it clear that no matter what issues are unsettled, the economy would be addressed first. “The time for waiting for jobs has passed,” said House Speaker Thomas P. O’Neill Jr., D-Mass., who was elected to his fourth term as speaker on Mon-
asked to anonymous The 11-member commission named by Reagan Monday to review his strategic weapons modernization program and MX basing alternatives includes Harold Brown, who was defense secretary under President Jimmy Carter, and James Woolsey, undersecretary of the Navy in the Carter administration. The only representative from the Reagan administration’s Defense Department is Dr.
Mideast fighting continues as third round of talks falters
BEIRUT, Lebanon (AP) Rival Moslem militiamen pounded the slums of Tripoli today with artillery, mortar and rocket barrages. Police said the fighting killed 30 people, the highest single-day toll in the 11-week-old battle for control of the northern port. In Khalde, a southern Beirut suburb, U.S., Israeli and Lebanese negotiators failed in their third round of talks to reach agreement on a negotiating agenda for withdrawing all foreign troops from Lebanon. Observers say a breakthrough in the talks is unlikely until Israeli Prime Minister Menachem Begin
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cuts Reagan has tentatively approved is up slightly from the total contemplated in November, when the president authorized budget director David A. Stockman to find $26 billion in savings. Officials said larger domestic cuts are now being sought because of the more pessimistic administration economic forecast, which shows 1984 spending and the deficit rising faster than previously thought. Budget officials declined to detail the proposed savings, but said they touch on a broad array of domestic programs, including Medicare and Medicaid
day. “The time for action for jobs is at hand.” Senate Majority Leader Howard H. Baker Jr., R-Tenn., said he plans to develop a legislative agenda aimed at tackling economic problems well in advance of Reagan’s speech. With unemployment at 10.8 percent in November, House Democrats are likely to renew their push for a public service jobs program, with support in * the Republican-controlled Senate. Baker has vowed that “there will be a jobs program” in the 98th Congress, whether Reagan supports it or not.
Marvin Atkins, director of offensive and space systems. Atkins will not be a voting member of the commission, but will serve as an executive officer. Asked why the new commission did not include any top officials of the Defense Department. one administration source said, “The intention is not to give the president pre-cooked advice.” Defense Secretary Caspar Weinberger's staff prepared the recommendations that led to
meets with President Reagan next month in Washington. At Monday’s session, Israel again demanded the first step be the normalization of relations with Lebanon, which, in turn, insisted the talks must first deal with withdrawing an estimated 60,000 Israeli, Palestinian and Syrian troops from the country. Lebanese Foreign Minister Elie Salem met with US. presidential envoy Morris Draper after Monday’s session and urged increased American efforts to work out a compromise, the state-owned radio reported. A fourth session is scheduled Thursday in the northern Israeli border town of
Bank failures hit 42-year peak
By The Associated Press The recession took its toll on the banking industry in 1982 as bank failures reached a 42-year peak, but the latest government reports point to an improving economy. Federal banking regulatory gencies said Monday that 43 banks failed last year, the highest number since 1940. Also, -46 savings and loan associations were merged with government assistance the highest yearly total ever. The most widely publicized bank failure last year was that of Penn Square Bank of Oklahoma. Its collapse was linked to energy loans that went sour as the economy weakened
but excluding Social Security. The budget cuts now under consideration would not represent actual reductions from spending levels expected for the current fiscal year. To the contrary, overall spending next year is sure to rise. Rather, the cuts amount to savings from what the government would spend next year if nothing were done to slow the automatic expansion of programs to keep up with inflation, population growth and in the case of social welfare benefits increased unemployment and other fallout resulting from a weak economy.
The House approved a $5.4 billion jobs program in the closing hours of the 97th Congress; the Senate adopted a more modest $1.2 billion version. Both were dropped in the face of a veto threat. Congress also must start over in writing a federal budget, this one for the fiscal year beginning Oct. 1 High unemployment, however, has cut tax revenues while forcing federal spending up. As a result, economists are predicting that the deficit in the 1984 budget may reach S2OO billion.
the president's decision last November to base 100 MX missiles closely together. Last month. Congress rejected the “dense pack” basing plan, which faces even tougher going in the 98th Congress Although Weinberger originally favored other basing concepts, especially the idea of placing MX missiles on longendurance airplanes, he ultimately came around to the closely spaced basing idea, sources said.
KiryatShmona. The fighting in Tripoli also wounded 30 people, police said. So far, police say the fighting has claimed at least 133 lives in Lebanon's second-largest city, 30 miles north of Beirut. Thousands of inhabitants huddled in basements and bomb sheUers in Tripoli’s seaside slums for a fifth straight day, living on dwindling food supplies. There was no running water or electricity, police said. Tripoli hospitals sent out urgent appeals for medical supplies as pro-Syrian Alawite and Palestinian-backed Sunni Moslem militiamen pounded each others’ positions.
and the oil industry fell deeper into a drilling and price slump. Alan Whitney, spokesman for the Federal Deposit Insurance Corp., said eight of the 43 bank failures last year involved mergers of mutual savings banks. There were 10 failures in 1981, including three mergers of savings banks. Meanwhile, the Commerce Department issued two reports that showed new strength in factory orders and construction spending. The department said orders to factories for new manufactured goods rose 0.7 percent in November after plunging 4.1 percent the previous month. Robert Ortner, the Commerce
Raggedy Ann to survive death of Knickerbocker T oys EDISON, N.J. (AP) For years, an army of smiling, orange-haired Raggedy Ann dolls, reinforced by 22 varieties of cuddly stuffed toys, marched out of a toy factory in this central New Jersey community. All seemed well for the dolls' manufacturer, the Knickerbocker Toy Co., and executives expanded the operation by adding a warehouse here and renting plush new corporate offices in nearby Plainfield. Then. “The Dukes of Hazzard" turned on them. The trouble started when some of the 60-year-old company’s stalwarts, such as teddy bears and fuzzy bunnies, lost popularity. Knickerbocker turned to television for new ideas. The company invested heavily in a line of products based on one of television’s most popular adventure series, “The Dukes of Hazzard.” Its faith in the car-racing hillbillies led to the manufacture of an entire line of products based on the show, including tiny cars launched by plastic wristbands. When two of the serial’s principal actors Tom Wopat and John Schneider quit last summer, viewers soured on the show and so did retailers. Returned shipments of Dukes toys began pouring into the warehouse. ‘“The Dukes of Hazzard’ show was all the way up to (number ) 3 or 4 in ratings, and we woke up one morning and it was way down,” said Jeffrey Holmes, a vice president of Warner Communications, the parent company of Knickerbocker as well as Warner Bros. Television, which produces “Dukes.” “It caught them (Knickerbocker) by surprise. It caught us by surprise. ‘Dukes’ for a number of years was a very hot product,” Holmes said. “You live and die with the success of the show. And in a year like this, with a deep recession, retailers are nervous and quick to cancel orders.” Warner, which took over the company five years ago. announced the day before Thanksgiving it would scrap the toy company, which analysts projected would end the year with a shortfall of up to S3O million. “Working here you can see they’re not making money.” said Cliff Jackson, a shipping clerk in Edison and one of 716 employees the company is laying off. “We re shipping it out and getting it back almost as fast.” The company had come a long way from the day in 1922 when Leo S. White founded a “toy hospital” in New York City. White had a knack for latching onto time-enduring toys that sold well with little or no advertising. In 1964, White was granted the exclusive rights to Kaggeay Ann and Raggedy Andy, dolls based on the books about a lovable rag doll and her brother. He moved the company from New York City to New Jersey two years later and the company began its greatest period of growth. Hobbie Hollie dolls. Snoopy dolls and a menagerie of Sesame Street characters were added to the inventory. The company’s sales catalogue bulged to more than 90 pages. But as Knickerbocker grew more trendy, its risks soared. Independent analysts suggest Knickerbocker’s management did not realize their empire could be hurt bv the television ratings game. “Those things that are no longer very popular do not necessarily mean they will no longer sell," said an executive for Toys “R" Us, the world’s largest toy specialty retail chain. “But many stores just try to catch the fads of the times, and when the fad is over they drop it.” Warner, anticipating a fourth-quarter slowdown and seeking to strengthen its money-losing cable television subsidiary, chose to dump the unprofitable Knickerbocker. It has sold its most time-tested toys, including the Raggedy Ann, Sesame Street, Snoopy and Walt Disney lines, to Hasbbo Industries Inc. of Pawtucket, R. 1., which plans to continue their production. “Stable toys are up some years and down some years, but they're basically dolls that don’t lose their popularity,” said Holmes. “Raggedy Ann has been around forever. Snoopy has been around forever. And they’ll continue to be here.”
Department's chief economist, called the pickup in orders “a good result.” But he added, “It was somewhat a drop in the bucket, and we need a lot more drops.” In a separate report, the Commerce Department said construction spending in November rose 3.5 percent. That followed a revised increase of 0.4 percent in October and was the biggest one-month gain in nearly two years. In other news: Yields on six-month Treasury bills are down for the fifth straight week, and yields on three-month securities have
also declined, officials say. About $5.8 billion in new sixmonth Treasury bills were sold at auction Monday at an average discount rate of 7.946 percent, down from the 8.054 percent of last Monday. In addition, the government sold about $5.8 billion in threemonth bills at an average rate of 7.896 percent, down from--7.975 percent. The yields, a measure of thS cost of government borrowing from the public, were the lowesl since the Oct. 18 level of 7.762 percent for six-month bills and the Dec. 20 level of 7.857 percent, for three-month bills.