News In Brief

The US

President Clinton proposed a $500-per-child tax credit for families with children aged 16 and under. He was trying to influence House and Senate reconciling of their tax-cut bills. Both bills set the limit at 17. Clinton's proposal would phase out the cut for families making $60,000 or more through 2000 and $80,000 or more after that. It also would give poor families who pay no taxes up to $500 per child. On capital gains, Clinton proposed a broad tax cut. He also would increase the tax on cigarettes.

Arkansas state trooper Ronald Anderson said he wasn't telling the truth when he confirmed reports of Clinton's marital infidelities when Clinton was governor of Arkansas. Many reports had "little, if any, basis in fact," The New Yorker quoted him as saying. Anderson said he lied because Clinton foe Cliff Jackson offered him a high-paying job in return. Jackson denied the charge. The magazine quoted a former co-worker of Paula Jones as saying she showed "bubbly enthusiasm" after meeting Clinton in 1991. Jones is suing Clinton for alleged sexual harassment during the encounter.

The US should not tax or regulate the Internet, the administration was set to recommend, because taxes and regulation could impede Internet commerce. The administration urged the industry to regulate itself by designing a ratings system for Web sites and by promoting software that allows parents to block objectionable material.

The Army promoted four women to head combat battalions - a first. Observers say it's a sign the so-called "glass ceiling" is being shattered. Each woman will oversee 500 to 800 soldiers in Patriot missile batteries. Of the nearly 2,000 officers in the Army's air-defense units, 155 are women.

AT&T is leaving the door open to another merger after talks with telecom giant SBC failed, sources familiar with the matter said. AT&T, the nation's largest long-distance firm, still seeks a partner to market local service. Analysts say another Baby Bell or GTE are possibilities.

A Hollywood lawsuit shows animation's moneymaking power. Former Disney Studios chief Jeffrey Katzenberg seeks $250 million from the company for breach of contract. Corporate records filed in the suit show Disney's movie division would have lost $100 million in the early 1990s. But hits like "Beauty and the Beast" and video rereleases of movies such as "Fantasia" bolstered sales - accounting for half of Disney's entire 1992 profits. Katzenberg left Disney in 1994 and says he deserves more money. The trial starts Nov. 18.

The nation's shortage of teachers forces many of them to teach subjects they know little about, according to a new federal study quoted by the St. Petersburg Times. It found 41 percent of science students and 25 percent of math students are taught by teachers who did not even minor in those fields. Officials say people qualified to teach the classes can make more money in business.

The Federal Reserve is not expected to raise interest rates when its policymaking committee meets today. Meanwhile, the Commerce Department reported consumer spending rose a modest three-tenths of a percent last month, although home sales jumped an unexpected 7.1 percent. The numbers are the latest in a mix of statistics pointing to a slight economic slowdown in the second quarter - convincing economists the Fed wouldn't act.

What would drive an American law-enforcement official to spy on his own country? Former FBI agent Earl Pitts, who's serving 27 years for attempting to spy for the USSR and Russia, says it was anger and money. He told Newsweek he was frustrated with his first FBI job, operating alone in rural West Virginia. Later, his $25,000 salary wasn't enough to make ends meet in New York City. He says he "was shoved by the bureaucracy" and ultimately shoved back.

Fourteen identical, million-dollar yachts are plying the Atlantic on their way to Southampton, England, on the final leg of a challenge race sponsored by MCI and British Telecom. Volunteers, who paid up to $30,000 each, are sailing the 65-foot, steel-hulled vessels in the "wrong direction" - against prevailing winds and currents around the world.

The World

In solemn ceremonies amid a steady rain, China assumed control of Hong Kong after 156 years of British rule. The day's activities were peaceful, with authorities allowing small demonstrations by democracy activists. But at the legislative building a confrontation appeared likely as activists threatened to use a ladder to climb to the balcony after being denied permission to protest the swearing-in of a Beijing-appointed assembly to replace lawmakers chosen by secret ballot.

In Beijing, police and paramilitary units cleared Tiananmen Square of thousands of uninvited spectators to make way for official ceremonies to mark the Hong Kong handover. Residents were told to watch television coverage at home. In London, only Chinatown appeared to go out of its way to commemorate the occasion.

Israeli Foreign Minister David Levy planned an announcement "in the coming days" on whether he would remain in Prime Minister Netanyahu's government. Their rift has delayed appointment of a new finance minister and increased speculation that early elections will be called. Meanwhile, a Jerusalem newspaper reported that Israel had asked for a multinational force led by France to replace its troops in southern Lebanon.

Veteran conservative politician Mesut Yilmaz became Turkey's new prime minister. He forged a coalition with two other secular political parties, winning the approval of President Suleyman Demirel. Yilmaz succeeds Necmettin Erbakan, who resigned under pressure from the military after only a year in office because he refused to rein in a trend toward Islamic fundamentalism.

NATO peacekeepers escorted Bosnian Serb President Biljana Plavsic to her office in Banja Luka after she had been held in custody overnight by opponents of her government. The incident stemmed from her attempt to fire Interior Minister Dragan Kijac in a crackdown on corruption in Serb administrative ranks. Kijac is a loyal supporter of indicted war criminal Radovan Karadzic, who remains a powerful figure in the postwar Bosnian Serb regime, although he was forced from its presidency last year.

President Sali Berisha conceded defeat in Albania's election and urged supporters of his Democratic Party to mount a vigorous opposition to the new left-wing government. But his address made no mention of the victorious Socialists and he did not indicate whether he would remain in office, as a law passed in the post-Communist era permits him to do.

Two weeks after an elaborate ceremony in which they handed back 70 government prisoners, leftist rebels in Colombia ambushed an Army patrol, killing five men and wounding 17 others. The attack took place adjacent to an area that Colombia's government had declared a 30-day demilitarized zone in exchange for the return of its soldiers. Many Colombians had hoped the trade would lead to peace talks between the sides.

"Construction king" Jrgen Schneider went on trial in Frankfurt, in what legal observers say may be the biggest fraud case in German history. He is charged with falsifying documents to deceive banks into lending hundreds of millions of dollars for his development projects. Schneider's financial empire collapsed in 1994, and he fled the country, owing more than $3 billion to 1,600 creditors. He was arrested in Miami a year later and extradited for prosecution.

Leaders of Caribbean governments gathered in Jamaica for a five-day conference aimed at lowering trade barriers in the region. Among their considerations at the Montego Bay meetings: abolishing all tariffs and the eventual establishment of a single currency for the 14-member Caribbean Community.

Etceteras

"We share with the world the happiness of the grand family reunion."

- The government-run China Daily, on the return of Hong Kong to Beijing's control after 156 years of British rule.

Alan Brown of Lindenwold, N.J., is proof that there still are honest people in the world. He and his wife had lost their jobs, then his unemployment benefits ran out. So when he found a $10,000 savings bond in the pocket of a used suit he'd bought, his financial woes seemed over. But the bondholder's name was on the back, and it turned out he was in a nursing home, recovering from an accident, and needed the money even more. Brown returned the bond. His only reward was some gas money for the trip, but he says he knows he made the right decision.

Matthew Draper made the right choice, too, on the fourth tee at Cherwell Edge golf course in Middleton Cheny, England, when he pulled a three-wood from his bag of clubs. His drive soon disappeared from view. But the ball turned up in the best possible place - at the bottom of the cup - giving him a coveted hole-in-one. Most golfers would agree that a three-wood is way too much club to use on a 120-yard, par-three hole. But then, Matthew is only 5.

The Day's List

Another Nicolas Cage Hit at the Box Office

For the second time in a month, Nicolas Cage has starred in a new release that filmgoers made No. 1 at the box office. "Face/Off," a violent thriller also featuring John Travolta, nudged last week's leader, "Batman & Robin," all the way to third place. Cage's "Con Air" was the top-grossing film the weekend of June 6-8. Last weekend's most popular movies and their estimated grosses (in millions):

1. "Face/Off" $22.7

2. "Hercules" 21.5

3. "Batman & Robin" 15.4

4. "My Best Friend's Wedding" 15.3

5. "Con Air" 5.5

6. "The Lost World: Jurassic Park" 4.4

7. "Speed 2: Cruise Control" 3.2

8. "Liar Liar" .94

9. "Austin Powers, International Man of Mystery" .75

10. "Ulee's Gold" .63

- Exhibitor Relations Inc./AP