Banner Graphic, Volume 20, Number 10, Greencastle, Putnam County, 15 September 1989 — Page 2

THE BANNERGRAPHIC September 15,1989

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19-17 vote sets up Foley-Bush tangle over capital gains tax cut

WASHINGTON (AP) House tax-writers’ narrow approval of a capital gains tax cut sought by President Bush sets the stage for the first major leadership test of new House Speaker Thomas S. Foley Jr. and his top Democratic deputies. Over vehement objections from Foley and other party leaders, six Democrats on the House Ways and Means Committee joined 13 Republicans in a 19-17 vote Thursday to cut the tax. COMMITTEE Chairman Dan Rostenkowski, D-111., called his panel’s action “a financial disaster” and “ultimate expression of ‘feel good’ economics” that could unravel the rate-equalizing, loopholeclosing tax reforms of 1986. White House spokesman Marlin Fitzwater said, “We are pleased by the vote and we will be working hard to sustain it on the floor.” The plan approved by the committee would reduce the tax rate of 33 percent to 19.6 percent for the next 27 months. The tax rate then would rise to 28 percent but would be “indexed” to tax only increases exceeding the annual inflation rate. THE NET EFFECT to taxpayers is similar to Bush’s campaign proposal to reduce the capital gains tax rate to IS percent without

‘Silent Sam’ silent too long, Lantos claims

WASHINGTON (AP) Former Housing Secretary Samuel Pierce’s abrupt cancellation of plans to testify today in the House investigation of his scandal-plagued agency shows “he’s got something to hide,” one Republican says. Pierce said late Thursday he has not had time to prepare his testimony, and accused the subcommittee of unfairly denying his request for an extension. “I WILL NOT voluntarily appear,” Pierce said in a statement. “I have fully and completely cooperated with the subcommittee right up until today, but its refusal to allow me an additional two weeks preparation time, when numerous other witnesses have been granted even longer postponements, simply is unfair.” He said he would be willing to appear at a later time. The panel’s chirman, Rep. Thomas Lantos, D-Calif., said he

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RICHARD GEPHARDT Calls plan ‘ludicrous’

indexing. The Ways and Means budget bill also lowers the premiums for catastrophic health insurance for the elderly and finances a massive increase in child-care subsidies for low-income families. The 1990 fiscal year begins Oct. 1. The six Democrats, led by Reps. Ed Jenkins of Florida and JJ. Pickle of Texas, resisted weeks of entreaties from Foley and House

would hold the hearing nonetheless and seek to subpoena Pierce if he failed to show. “SHOULD HE NOT appear, I will consider his failure to do so a breach of faith with the subcommittee and a deceitful and misleading act,” said Lantos. The panel is investigating alleged fraud, influencepeddling and mismanagement during the eight years Pierce headed the Department of Housing and Urban Development. A Republican member, Rep. Christopher Shays of Connecticut, said Pierce’s announcement was “outrageous” because he previously had been granted a month’s extension. “It tells me he’s got something to hide,” Shays said in a telephone interview. “If he doesn’t show up we are going to subpoena Mr. Pierce for a series of hearings. We obviously can’t trust him.” PIERCE’S ATTORNEY, Paul Perito, said in an interview, “Mr. Pierce wants to tell his entire story. However, he needs to be adequately prepared to do so.” Pierce’s announcement was the latest twist in an investigation that already has seen two former top Pierce aides at HUD assert their Fifth Amendment rights against self-incrimination and refuse to tes-

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Democratic Leader Richard Gephardt of Missouri that the proposal is little more than a giveaway to the rich. “THE NOTION THAT wealthy Americans need another tax break at the expense of working people is ludicrous,” Gephardt said. Because the wealthy own most capital assets such as stocks, bonds and real estate they would benefit the most from the tax break. The Joint Committee on Taxation estimated that 80 percent of the $4 billion to $5 billion in benefits will go to taxpayers with incomes above SIOO,OOO a year. Supporters contend a capital gains tax cut would help the economy by encouraging investment CUTTING THE capital gains rate would bring in more tax money for the next three years, by providing incentives to sell such assets, according to government estimates. However, after that the reduction would cost the Treasury $2.8 billion to $5 billion a year, according to the Joint Committee on Taxation. Rostenkowski expressed bitter frustration that one-fourth of his committee’s Democrats sided with the 13 Republicans to give them a majority on more than a half-dozen votes aimed at whittling down the

tify before the subcommittee. The panel is investigating allegations that prominent Republicans and former HUD officials won favored treatment from the agency during Pierce’s eight years as secretary and that poor management left HUD unable to account for hundreds of millions of dollars. PIERCE APPEARED voluntarily in May and said he took no direct role in HUD funding decisions) But his sworn testimony was challenged by a former HUD official who said Pierce personally ordered her to fund a sls million Durham, N.C., project that was op-

West must be diligent in defense, Eagleburger says

By BARRY SCHWEID AP Diplomatic Writer WASHINGTON (AP) The gloomy and suspicious view Henry Kissinger had toward Moscow lives on in the Bush administration 12 years after he stepped down as secretary of state and as the Cold War recedes. Hundreds of U.S. and Soviet nuclear missiles are being junked, Poland and Hungary are veering away from Marxist orthodoxy without any apparent interference from the Kremlin, and next week the two superpowers may announce a landmark agreement to open their chemical weapons plants to each other. BUT BEFORE YOU break out the champagne and bum your blueprints for an air raid shelter, consider what Lawrence Eagleburger, the deputy secretary of state, had to say the other night at Georgetown University. Eagleburger, a foreign service officer who was close to Kissinger, has had more than 30 years of experience to sharpen his own perception of the Soviet Union and the NATO alliance, which was created on the assumption Moscow menaced the West Even as Gorbachev stakes out arms control agreements with the United States and grafts some touches of capitalism to his creaking economy, Eagleburger finds cause for being anxious about the West’s future. HE FOUND PRACTICAL economic reasons for the cuts Gorbachev is making in Soviet weapons and for slowing “overseas adventurism.” And, Eagleburger warned, “herein lies a danger to Western interests that with the perception growing among the Western public that the Soviet threat has

Bush sends SIOO million in food to support Polish reform

WASHINGTON (AP) President Bush is doubling food aid to Poland to SIOO million next year “to support the process of change” there, but the Democratic author of a rival plan calls it a merely a stopgap effort Sen. Patrick Leahy, D-Vl, chairman of the Senate Agriculture Committee, said Bush’s plan does not go nearly far enough to help

capital gains amendment cosponsored by Jenkins and Rep. Bill Archer, R-Texas. » “IF THE EVIDENT divisions within the committee are any indication, the House is in for a painful fight,” said Rostenkowski. Democrats voting with Jenkins and Pickle for the tax cut were Reps. Mike Andrews of Texas, Beryl Anthony of Arkansas, Andrew Jacobs of Indiana and Ronnie Flippo of Alabama The changes in the Medicare catastrophic health insurance plan and new child benefits were informally approved earlier. Over five years, lower-income families would receive an additional sl4 billion in tax credits and $2 billion in state-administered grants aimed at improving child care for working parents. IN RESPONSE TO complaints from many retirees, the surtax financing catastrophic health insurance would be cut in half for the wealthiest 40 percent of retirees but the flat monthly premium paid by all but the poorest Medicare beneficiaries would rise. The bill would allow retirees to turn down catastrophic coverage but only if they opt out of Medicare Part B, which pays physicians’ fees.

posed by several agency experts. The project was supported by Charles Markham, then the city’s mayor and a former law partner of Pierce’s. The developer also hired as a consultant Lou Kitchin, who was southeastern political director of the Reagan and Bush presidential campaigns. Pierce also has been criticized for lifting restrictions on a HUD lender whose portfolio now includes more than $538 million in defaults. Pierce made the decision after being lobbied by former HUD Secretary Carla Hills, now the Bush administration’s trade representative. "

diminished, there will be a tendency among the member states of the NATO alliance to compete in expanding their relationships with the East.” That, the senior US. official concluded, would be a mistake and the Europeans should know better. “AFTER ALL,” Eagleburger said, “the Europeans are condemned by geography to live in the shadow of Soviet military power whether or not the Soviet Union in the long run changes as much as all of us hope.” Eagleburger says until those changes take root it would be wise “to avoid bankrolling merely cosmetic Soviet reforms or reach arms control agreements which undermine NATO’s ability to deter aggression.” It is not clear how pervasive this view is within the Bush administration. Secretary of State James A. Baker 111 and Soviet Foreign Minister Eduard A. Shevardnadze will meet next week in Jackson Hole, Wyo., to make preparations for a superpower summit. EAGLEBURGER is by no means suggesting summits are a bad idea But he says the United States and the allies should go slow in making deals with Moscow. “We are hearing it said we need to take measures to ensure the success of Gorbachev’s reforms,” the deputy secretary of state said. “This, however, is not the task of American foreign policy, nor should it be that of our Western partners. Our task, after all, is to devise policies which will serve our interests, whether Gorbachev succeeds or fails.” EDITOR’S NOTE Barry Schweid has covered diplomacy for The Associated Press since the Kissinger era.

Poland meet its long-term needs. BUSH ANNOUNCED the food aid increase for fiscal 1990 on Thursday, just hours after Leahy unveiled his own $2.5 billion “food for peace” package. The president’s plan calls for shipments to Poland of beef, pork, com, butter, butter oil, sunflower oil, cotton and rice. The new SSO million infusion was in addition to

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Otto Harrison, head of Exxon's oil spill cleanup operations in Alaska, explains how the bioremediation treatment cleans under rocks as well as on top during an inspection tour of Eleanor Island, which was one of the areas most heavily polluted following March’s oil spill in the Prince

Exxon completes cleanup but oil’s scars remain

VALDEZ, Alaska (AP) Cleanup workers and state officials say there’s still plenty of oil fouling the shores of Prince William Sound, but Exxon insists the beaches are nearly free of oil as a summerlong effort ends. Exxon officials pronounced the 1,100 miles of oil-tainted shoreline “environmentally stable” Thursday and proclaimed their 25-week cleanup of the nation’s worst oil spill a job well done. EXXON CORP. Chairman Lawrence Rawl said in Juneau that the affected shores of the sound and Gulf of Alaska farther south “are certainly what most people would call clean.” But Dennis Kelso; the state’s environmental commissioner, was not pleased with what he saw when he toured shorelines on two islands south of Valdez on Thursday. “This beach is not environmentally stable,” he said as he poked a stick into thickly oiled rocks on Knight Island. “If we had wildlife here, they’d be pretty heavily oiled.” EXXON OFFICIALS said they expect to declare the summer cleanup complete today, 25 weeks after the tanker Exxon Valdez cracked open on a reef and spilled nearly 11 million gallons of crude oil. State officials are pressuring Exxon to commit to a greater research effort over the winter to determine the best way to resume the cleanup next spring. “The point isn’t that Exxon has done a terrible job,” Kelso said. “There’s just more to be done. We don’t need to wait until spring to get the preparations going.” EXXON OFFICIALS said the company will continue to monitor the spill and respond to major problems. About 300 cleanup workers will remain in Alaska, down from about 10,000 at the height of the effort. Otto Harrison, general manager of Exxon’s Valdez

SSO million in food Bush announced in early August for the new fiscal year that begins Oct. 1. It is on top of $8.4 million in emergency food assistance Bush ordered for the current fiscal year. Most of the food shipments will come from U.S. surpluses. POLAND HAS BEEN affected by severe food shortages and increasing prices.

William Sound by the Exxon Valdez. Bioremediation is a process in which the fertilizer Inipol is sprayed on the contaminated beaches after they have been steam cleaned. The fertilizer then enhances the activity of the oil-eating bacteria already present in the area (AP photo)

operations, said that while oil remained in some areas, it wasn’t enough to harm wildlife. “What you’ve seen is a coastline almost free of oil,” Harrison said. “You’re seeing the steady recovery of Prince William Sound.” State officials agreed Exxon’s efforts had resulted in some cleaner shorelines, but disputed the company’s rosy portrayal of an environmental rebound. ON HIS TOUR of the Knight Island shoreline, Kelso noted there were few signs of wildlife on what once was a shore rich with the sounds of life. Kelso said a chemical fertilizer recently sprayed on the rocks showed signs of breaking down the oil in some areas. In other spots, however, it appeared the cleanup was rushed to meet Exxon’s self-imposed deadline, Kelso said. On Green Island, Kelso used a pocket knife to scrape sunbaked oil off blackened rocks. “IT LOOKS AND feels like tar the way an asphalt driveway feels,” he said. Cleanup workers returned to Valdez by the hundreds Thursday on their way home. Many echoed the sentiments of Roger Consiel, who was on the first crew of 48 workers dispatched to the oiled beaches after the March 24 grounding of the oil tanker.. “I think we did some good,” he said. “But the oil’s going to be there for a while, that’s for sure. “I think Exxon should come back next year. There’s a lot left to be done.” Consiel, 39, was an unemployed cannery worker when an Exxon contractor hired him for cleanup duty. He returns home to his family with about $30,000 in spill wages in his savings account. “Not bad for 5Vi months’ work,” he said with a smile. “I’m pretty happy about it. It would be nice to come back next year, too.”

Bush had been under mounting pressure from Congress to do more to aid Poland’s new Solidarity-led government, not only from Democrats but from Senate Republican Leader Bob Dole of Kansas. Dole called Bush’s decision Thursday “a good investment in democracy and political reform for Poland.”