December 21, 1991

In a bold move to revive the slumping economy, the Federal Reserve chopped its bedrock discount rate today by a full point, to 3 1/2 percent, the lowest level since 1964. The surprisingly big cut was seen as part of a broad effort to stimulate borrowing and perk up an economy whose signs of recovery from recession have all but vanished. The discount rate is what the Federal Reserve charges on loans to banks but its significance is in the message it carries to the financial markets and businesses and consumers.

The striking action of the Federal Reserve today in pushing the interest rates it directly controls to their lowest levels since the 1960's may have been a desperate attempt to wrest control of the economy back from the politicians. For almost a decade, the dominant view in Washington has been that the astronomical budget deficit means that the White House and Congress have no leeway to cut taxes or increase spending, the normal Government response to bad times. Only the Federal Reserve through its monetary policy, the thinking went, could keep the economy on its feet.

Gov. Mario M. Cuomo brought his strangely drawn- out drama of indecision to a close today, not with a bang, but with a news conference. And even as the final uncanny act was playing out, he remained firmly in character: equivocal, eloquent and ultimately trapped by his own ambivalence. The thought process that led the Governor to today's decision -- he made it even as two chartered planes sat on the runway in Albany waiting to take him and reporters to New Hampshire -- will undoubtedly remain obscure.

It will be a different kind of Christmas for the Cardall family of Salt Lake City. All this week, they have been down in the basement, sorting and packing clothes, shoes, kitchen utensils, blankets and toys donated by friends and neighbors for two orphanages in Mexico. Today, 10 Cardalls will pile into the big Chevy Beauville van and a pickup truck and begin the 2,500-mile round trip to Chihuahua.

After 10 weeks of tortuous public deliberation that seemed to take him to the brink of candidacy, Gov. Mario M. Cuomo stepped back today and announced that he would not run for President in 1992. Only two months before the New Hampshire primary, his announcement gave final form to a Democratic field that had been largely overshadowed by Mr. Cuomo's potential entry. Less than 90 minutes before the 5 P.M. filing deadline for the New Hampshire primary, Mr. Cuomo told a crowded news conference in the Capitol that he could not run because of the lack of progress in negotiating a solution to the state's severe fiscal problems.