December 21, 1995

Under a sweeping proposal to restructure the industry, the head of the taxi commission is proposing raising fares by 20 percent, and is recommending that most of the increase go toward compensating drivers instead of fleet owners. The proposal would also limit how long cabs could stay on the road before having to be retired. In the past, fare increases have mainly gone into the pockets of fleet owners, but the head of the Taxi and Limousine Commission, Christopher R. Lynn, said he wants to attract better drivers by having them collect more of the latest increase. The proposal, expected to be presented today, is considered likely to be approved by the full taxi commission.

The House voted today for the first time to override a veto by President Clinton, reacting swiftly to his 11th-hour rejection of legislation to make it more difficult for stockholders to bring fraud suits. The Senate, which is more closely divided, made plans to vote later this week.

Republicans in the House of Representatives today scuttled an agreement to begin serious budget talks that their leader, Speaker Newt Gingrich, made with President Clinton on Tuesday, and negotiations became snagged once again. As a result, parts of the Government will remain closed for at least another day. The prospects of an eventual budget settlement, which have been flashing on and off like a strobe light for months, dimmed once more.

The Kmart Corporation, in a move that staved off any immediate threat of bankruptcy, reached agreement with its creditors yesterday to reorganize its debt and eliminate its common-stock dividend. Creditors agreed to delay demands for payment on $548 million in so-called "put" bonds due next year that Kmart, the embattled discount retailing chain, could not meet. And by bowing to Wall Street pressure to cancel the dividend, Kmart said it would hold onto as much as $220 million a year of its dwindling cash reserves.

In a significant shift in prison policy, Gov. George E. Pataki has proposed that the state's most violent and disruptive inmates be housed two to a cell as part of a plan to build three new maximum-security prisons by the year 2000. Now, all but 700 of the state's 21,123 maximum-security prisoners live in single cells, because prison officials thought double cells would lead to tensions and threaten the health of prisoners. But Mr. Pataki contends that putting two inmates in a cell will save money while allowing the state to add beds to an overcrowded prison system.