February 25, 1995

Fighting Gridlock in Albany Gridlock in New York State government is so bad that leaders should go outside normal legislative processes to fundamentally reorganize the government, a report says. Page 25. Affirmative Action Review Saying that "we shouldn't be defending things that we can't defend," the President has ordered a review of all the Federal Government's affirmative action policies. Page 9. Budget Measure Questioned Two Senate Democrats are giving their colleagues second thoughts over the probable role of the judiciary in any balanced-budget amendment. Page 7. Somalia's Uncertain Future As the last peacekeepers pack their bags, the lines of Somali workers waiting to be paid off by the U.N. in Mogadishu offer a graphic picture of Somalia's uncertain future. Page 3.

Wall Street investors broke out the champagne this week, celebrating what appeared to be an economic slowdown by setting new records in the stock market. But what's so great about a sluggish economy? And doesn't this mean a recession is just over the horizon? Perhaps, but not necessarily. In fact, the overwhelming advantage of a slowdown now would be to bolster sharply the odds of sustaining America's four-year-old economic expansion for at least another couple of years or so. "The biggest risk," said Edward Hyman, chief economist of the International Strategy and Investment Group, "is if the economy doesn't slow down."

The United States and Canada, after years of expanding trade, agreed today to open up their skies under a broad aviation agreement that will allow their airlines to fly any routes between the two countries. The accord, the centerpiece of President Clinton's second and final day in Ottawa, is expected to expand passenger and cargo services significantly, generate even more business between the two countries and lead to lower fares.

House Republican leaders said today that they had abandoned plans to abolish the Federal food stamp program and shift the responsibility to the states after senior Republican lawmakers from farm states rebelled. The decision marks the first significant setback for the House Republican campaign to pare social welfare programs established by the Federal Government over the last 60 years.

President Clinton opened a broad-based assault here today on the Republican-led campaign against big government. He called the balanced-budget amendment a bad idea, denounced the party's attacks on affirmative action and said deep cuts in current Federal spending amounted to a war on children. Turning to domestic politics at a news conference that was supposed to wrap up a meeting with Canadian leaders, Mr. Clinton accused Republicans of trying to divide voters along racial lines. He painted the spending cuts they have proposed as "radical right-wing measures," while back in Washington his lieutenants labeled the balanced-budget amendment "horrendous economic policy" that could deepen a recession by limiting the Government's ability to mitigate it with increased spending.