LEAD: THE peripatetic nature of American society has spawned all sorts of strange creations, among them billboards, Winnebagos, Walkman radios and car telephones.

Commuting: Have Mug, Will Travel

LEAD: Echoing concerns in neighboring states, Gov. Thomas H. Kean today disclosed growing shortfalls in the state's tax revenues and warned that New Jersey's next budget would be ''very tight.''

Jersey Faces Shortfalls in Revenue, Kean Warns

LEAD: Michael R. Milken, the head of the high-yield bond unit at Drexel Burnham Lambert Inc., will be removed from the firm and receive virtually none of his pay for last year as part of Drexel's settlement with the Government of charges of securities law violations, people familiar with the agreement said late yesterday.

Ouster Of Milken Seen Near

LEAD: European nations are undertaking the world's most ambitious high-speed rail project, which will tie Europe closer together by allowing travelers to move across the Continent at speeds up to 186 miles an hour.

Europe's Grand Plan for Web of Fast Trains

LEAD:  INTERNATIONAL  A high-speed European rail network that would sharply cut travel times is in the works. [ Page A1. ] THE ECONOMY  The F.D.I.C. wants new powers to increase premiums on banks and to rein in high-risk lending. [ A1. ] President-elect Bush's strategy for the Federal budget has begun to take shape.

BUSINESS DIGEST

LEAD: Money was on the minds of the gov-ernors of New York, New Jersey and Connecticut yesterday. They warned their constituencies separately of budget constraints necessitated by spending that is outpacing revenues.

The State of 3 States

LEAD: IN the 50's, people bought suites of furniture for the bedroom. In the 60's, the brave slept on water beds, and in the 70's the avant-garde chose platform beds to make a minimal design statement. Today, although four-poster and brass beds are still popular, the beds of choice are reinterpretations of antiques or one-of-a-kind designs.

The Brash Bed: Today's Bold Design Statements

LEAD: Testimony began today in an attempt by the Government to win more than $600 million in taxes from the estate of Samuel I. Newhouse, who built one of the country's largest newspaper chains before his death in 1979.

Trial Begins On Newhouse Tax Issue

INSIDE

LEAD: Calling drug abuse ''the single most ominous phenomenon of our times,'' Gov. Mario M. Cuomo today outlined a major new effort to combat drugs in New York despite the state's tremendous financial problems.

Cuomo Plans A Major Effort To Fight Drugs

LEAD: They were just a couple of guys from Texas, sitting around talking.

Chitchat During Pageant Is About Texas, Not Taxes

LEAD: President-elect George Bush's strategy for dealing with the Federal budget has begun to take shape, and Richard G. Darman, who has been given unchallenged authority to draft Mr. Bush's budget policy, is trying to sell it to Congress.

TALKS BY DARMAN SHOW BUSH'S PLANS TO HANDLE BUDGET

LEAD: The Brooklyn block where Norris Graham died is a bleak stretch of sidewalk that looks as if it is more for dying than living. Garbage and glass are everywhere, and someone has spray-painted ''Keep Out Killer Dog and Mother'' on a door.

East New York, Haunted By Crime, Fights for Its Life

LEAD: American warplanes today shot down two Libyan fighters that displayed ''clear hostile intent'' in international waters off the Libyan coast, the Administration said.

CHEMICAL PLANT LINK DENIED

LEAD: An expert advisory panel to the Food and Drug Administration will meet today to consider surprising new evidence that the use of oral contraceptives may increase the risk of breast cancer.

New Data on the Pill Find Breast Cancer As a Possible Risk

LEAD: Deep down, what do people really want in a car door? That is not a trivial question for the Budd Company, which is using an increasingly popular Japanese quality control system to find the answer and make better doors as a result.

Raising Quality: Consumers Star

LEAD: The Federal Deposit Insurance Corporation proposed today to strengthen the deposit insurance system by giving it new powers to increase premiums on banks and to rein in high-risk lending.

Bank Regulator Asks for Powers To Raise Fees and Limit Lending

LEAD: AT first, Christa and Shayne Johnson treated each other with the wariness of two hungry cats who suddenly have to share the same food bowl. Each was 8 years old and used to being the only child of a single parent. When those parents were married eight years ago, Shayne and his father moved in with

In Blended Families, Rivalries Intensify

LEAD: In an aggressive step toward modernizing and expanding its fleet, Braniff Inc. said today that it would buy as many as 100 airplanes from Airbus Industrie in a deal valued at roughly $3.5 billion.

Braniff in Move to Buy 100 Planes

LEAD: Two recent studies conducted by Japanese and European organizations show that the United States' share of the world's electronics production has dropped far more dramatically than previously estimated, a United States trade group said today.

2 Studies Show Big Drops In U.S. Share of Electronics

LEAD: What do Robert R. Kiley and the average welfare mother have in common?

Metro Matters; A Time to Raise And a Time To Deny a Raise

LEAD: The often-staid Connecticut General Assembly began its 1989 session today in tumult, with the bitterly contested ouster of the powerful two-term Speaker overshadowing Gov. William A. O'Neill's warnings of fiscal constraint.

Connecticut Session Opens With a Jolt

LEAD: Stocks rallied strongly yesterday in a broad advance that market experts attributed to a stronger dollar and a late wave of program buying.

Stocks Rally as Dow Rises 33.04, to 2,177.68

LEAD: Panama's ousted President, Eric Arturo Delvalle, has written to Gen. Manuel Antonio Noriega offering to negotiate an end to the nation's political crisis, according to a document obtained today.

Ousted Panamanian Leader Offers to Talk With Noriega

LEAD: The chief counsel for the committee that disciplines lawyers in Manhattan announced Tuesday that he would resign, amid news reports that he mishandled charges of drug use and other misconduct against Joel B. Steinberg.

Chief of Steinberg Ethics Investigation Quits

Eduardo José Escobar is a Venezuelan-American professional baseball third baseman who is a free agent. He has previously played in Major League Baseball (MLB) for the Chicago White Sox, Minnesota Twins, Arizona Diamondbacks, Milwaukee Brewers, New York Mets, and Los Angeles Angels.

Eduardo Escobar, Venezuelan-American baseball player

Eduardo_Escobar

Krisztián Németh is a Hungarian professional footballer who plays as a striker for Hungarian club MTK Budapest.

January 5, 1989

Headlines from January 5, 1989

Commuting: Have Mug, Will Travel

Jersey Faces Shortfalls in Revenue, Kean Warns

Ouster Of Milken Seen Near

Europe's Grand Plan for Web of Fast Trains

BUSINESS DIGEST

Billboard 200

Giving You The Best That I Got

Cocktail

Rattle And Hum (Soundtrack)

New Jersey

Traveling Wilburys

Notable Births

Historical Context for January 5, 1989