February 7, 1997

Pres Clinton's chief budget negotiators say Republican Congressional leaders are insisting on cut in capital gains taxes; Democrats and Republicans say part two of any meaningful budget deal is finding way to change Government's calculation of inflation, which would greatly slow increases in Government's Social Security payments and other entitlements linked to inflation; say solving these two problems is hardly end of battle; photo (M)

Pres Clinton proposes $1.69 trillion budget for 1998 that he says will cut taxes on middle class, increase spending on education and health care and lead to end to deficits by 2002--and for almost 20 years after that; says his Administration will achieve its deficit-reduction goals with $350 billion bundle of program cuts and tax increases, including slowing growth of Medicare and extending some taxes; graph; photos (M)

Western Resources Inc is expected to announce within a few days the acquisition of Kansas City Power and Light Co for $2 billion in stock, bringing to an end a bitter nine-month battle for control; Western Resources would establish itself as Midwest powerhouse by combining Kansas City Power's 430,000 customers in Missouri with its 1.2 million gas and electric customers in Kansas and Oklahoma (L)

Peterborough, NH, high school student Colin Rizzio found that math question on Scholastic Assessment Test that he took in Oct had wrong answer; College Board, which administers test, says because answer was wrong, some 45,000 students, about 13 percent of those who took exam, will see their scores jump by as much as 30 points; it is first time since 1982 that SAT had to rescore test because of wrong answer; Rizzio photo (M)

Robert Plescia, 28-year-old police detective in Wood-Ridge fatally shoots himself in police headquarters (New Jersey Daily Briefings) (S)