Budget Battle Royal
Congressional leaders suffered multiple setbacks as moderate Republicans joined with Democrats to thwart key initiatives. The House failed to pass a health and education spending bill, largely because of cuts to social programs, while a five-year budget plan was narrowly approved only after deleting a provision allowing oil drilling in Alaska, a top priority of President Bush. Meanwhile, the Senate-passed budget plan failed to include an extension of reduced tax rates for capital gains and dividend income, another Bush priority.
Media Mogul Indicted
Conrad M. Black, whose conservative-minded media empire once included the Chicago Sun-Times, London's Daily Telegraph and Canada's National Post, was indicted by a federal grand jury in Chicago for siphoning off more than $50 million from the company he was supposed to run for public shareholders. Prosecutors allege Black used the money to maintain a lifestyle that included a private jet, a chauffeured Rolls Royce, staffs for four households and an eight-day trip to Bora Bora. Lord Black denied the charges.
Cooler Times for Housing
There were fresh signs the housing market was pulling back. Housing starts fell 5.6 percent in October while building permits posted the biggest percentage decline in six years, the government reported. A survey of business confidence among home builders also fell. Analysts cited rising interest rates, a tightening of lending restrictions, rising energy costs and curbs on suburban development, as well as a natural slowdown after years of record-breaking growth. Thirty-year fixed mortgages last week averaged 6.37 percent.
The government alleged in an affidavit that a U.S. official in Iraq took $546,000 in illegal payments to steer more than $13 million in contracts last year to an American businessman. It wasn't clear how Robert J. Stein Jr. got the job with the U.S.-led Coalition Provisional Authority as a controller in Al Hillah, Iraq -- he had pleaded guilty in 1996 to federal fraud charges. The Justice Department alleged Stein used some of the money he received from Philip H. Bloom to make restitution payments required by that prior conviction.
At Ease on the Yuan
As President Bush headed to Beijing, the administration signaled it would give China more time to allow the value of its currency, the yuan, to rise against the dollar -- a key sticking point in trade relations. Treasury will refrain from citing China for "currency manipulation," while China critics in the Senate said they would wait until next year to push for a vote on slapping tariffs on Chinese imports. Fed Chairman Alan Greenspan, meanwhile, said even revaluation would do little to reduce the trade deficit with China.