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Tfc. T • i By The News Digest Social security benefits will climb m Gulf crisis sends inflation rate soaring WASHINGTON - Americans’ spending power sank again in Sep tember as the Persian Gulf crisis pushed prices up a sharp 0.8 percent for the second straight month, the govern ment said Thursday. Still, inflation not tied to oil prices remained rela tively mild. If the Labor Department’s Con sumer Price Index continued increas ing at the September pace for a year, it would produce an annual inflation rate of 9.5 percent. Most economists believe price increases — absent the outbreak of a shooting war— will return to a more normal level by the end of the year. The oil shock nevertheless has added a new burden for an economy that was already on the brink of recession. “You take out energy and the numbers aren’t that bad. But on the other hand, people have to buy the energy and it gives you an annual inflation rate roughly double the rate of wage growth,” said economist Donald Ratajc/.ak of Georgia Slate University. "It means that people won't have a lot of money to spend on Christmas,” he said. The “core” inflation rate — prices excluding food and energy — was0.3 percent in Sept-' iber, down from 0.5 percent in August. For the first nine months of 1990. prices increased at an annual rate of 6.6 percent, well above the 4.6-pcr ccnt increase for all of lasi^ear. The rate for all of 1990, if it comes in close lo 7 percent as now expected, will be the worst since 1981, when prices shot up 8.9 percent. The pickup in inflation so far this year helped bring about the biggest boost in Social Security benefits in 8 1/2 years. Based on Thursday’s re port, the government announced a 5.4 percent rise in benefits beginning in January for the 40 million Social Security recipients. The annual cost-of-living increase will mean that the typical benefit check will climb to S602 per month next year from S571 this year. The maximum monthly benefit for a worker retiring in 1991 at age 65 will rise by $47 to S1,022, the Social Security Administration said. Since 1975, benefits have risen automatically each year, keeping pace with the annual inflation rate, with the exception of six months in 1983 that were skipped to help bail the Social Security system out of a crisis. The 5.4-percent rise, which will show up in Jan. 4 benefit checks, followed increases of 4.7 percent this year and 4 percent in 1989. It will be the biggest advance since a 7.4-per cent jump in July 1982. The in nation figures also trigger a 5.4 percent increase in the amount of wages subject to the payroll lax that finances the Social Security and Medicare programs. The wage ceil ing w ill climb from $51,3(X) to $53,400. This increase, which w ill affect 10 million taxpayers, means that the maximum payroll tax for employees news, with the Dow' Jones average of industrial slocks advancing. Analysts said traders were doing some cau tious buying in the bel ief that worries about the economy had gone to un justified extremes. In a separate report, the Labor Department said Americans’ average weekly earnings, after adjusting for inflation, increased 0.4 percent in September. Still, they were down 1.5 percent from a year ago. In lire inflation report energy prices in September jumped 5.6 percent, the _I Brian Shellito/Daily Nebraskan worst rise on record since the depart ment began tracking the sector in 1957. Gasoline soared 9.5 percent, the largest increase in 17 months, and fuel oil rose 15.9 percent. For August and September together, gasoline rose 17.9 percent and fuel oil was up 33.7 percent. Analysts expect the bad news to continue through November or De cember, even if oil prices stabilize near where they arc now — around S40 a barrel, double the July price. SOCIAL SECURITY CA'i 440 (5CQA ok.?o rise in Amer i. * iwm benefits Average monthly benefit check 1990: $571 1991: $602 i * : : : ""; J .... ■ .... will rise S160.65 to $4,085.10 next year. The employee tax is matched by employers. In addition to boosting consumer inflation based on oil and various energy products, the Aug. 2 Iraqi invasion and its aftermath hurt the U.S. merchandise trade deficit. Itrosc 2.4 percent to a seven-month high of $9.3 billion in August. Increasing oil prices pushed imports to a record high, more than offsetting a modest rise in exports. The stock market shrugged off the Soviet economic reform planner says critics harm loan chances MOSCOW-An adviser lo Mikhail S. Gorbachev said on Thursday that critics like Boris N. Yeltsin are need lessly eroding international confidence in the Soviet Union by attacking the president’s economic rescue plan. “Every such speech robs us of several billion dollars’ worth of (for eign) loans,’’ Abel Aganbegyan, an architect of Gorbachev’s compromise reform plan, told committees of the Supreme Soviet legislature. The economist’s charges heated up the political atmosphere as Gor bachcv prepared to present his four stage economic plan to the full, 542 member Supreme Soviet today. Aganbegyan charged that “politi cal instability” caused by Yeltsin woul< force Western banks and countries t< think twice about offenng loans nccdci to help the Soviet Union sw itch fron a centrally planned to a market ccon omy. Yeltsin, president of the Russiai Federation, the largest of the 15 So viet republics, said in comment published Wednesday that the presi dent’s plan was a “catastrophe” am “doomed to fail” within months. Gorbachev’s four-stage cconomii blueprint, which has no timetable would begin by reducing the national budget deficit, cutting the money supply, increasing production of consumer goods and boosting agri cultural output. In the second stage, prices on 70 percent of all gtxxLs and services w ould be freed to respond to market forces and small private businesses would be encouraged. The third stage envisions a free market for housing, a modern bank ing system and entrepreneurship. The final stage would end govern ment monopolies in many industries and allow the ruble to be freely traded against other world currencies. Gorbachev and Yeltsin arc locked I in a battle for the Soviet people’s > confidence, and recent public opin 1 ion polls indicate Yeltsin is w inning, i Yeltsin, a former Gorbachev ally, - has become more radical than Gor bachev in pushing reforms, and is i promising to pursue the economic - plan he likes best: a 500-day market i transition drafted by economist Stan - sislav Shalalin. 1 The public is unlikely to endure the inflation and unemployment cx : peeled to accompany any switch to a , market economy unless it has confi dcnce in the leader carrying out the reforms. Gorbachev, facing a breakdown of the economic system, realized this in late July when he set up a committee with Yeltsin to forge a compromise. But the two leaders quickly broke ranks, and their rift is widening fur ther. Even the official news agency Tass, traditionally loyal to the Kremlin, jumped on Yeltsin's bandwagon Thursday. “The ‘market package’ prepared by the Shatalin group is possibly the only form of surgery that can help the ailing Soviet economy recover,” Tass said in an unsigned commentary. “Gorbachev is unwilling to con sider radically breaking the manage rial structures amid increasing politi cal instability. Such a break would be inevitable if the Shatalin program were adopted,” Tass said. Yeltsin has made much the same criticism, saying Gorbachev’s plan is an attempt “to perpetuate the system hated by the people.” He said the Russian Federation would go ahead with its own f»(X)-day program, start ing Nov. 1. Iraq offers oil at pre-invasion prices Members of the U.N. Security Council on Thursday were weighing a war-reparations measure against Iraq. The Baghdad government, battered by global sanctions, ordered ration ing of medicines and offered to sell oil — cheap. In a renewed diplomatic bid to break in the Gulf impasse. Secretary of Slate James A. Baker 111 met Thurs day with an envoy from Soviet Presi dent Mikhail Gorbachev. The envoy, Evgeny Primakov, is to meet to day with President Bush. The Washington Times, in Thurs day’s editions, quoted unnamed U.S. officials as saying Primakov was carrying a Soviet peace plan. The proposal calls on Iraq to withdraw from Kuwait—possibly in exchange lor elections in the emirate and cash compensation to Iraq to settle an oil claims dispute. Soviet Foreign Minister Eduard Shevardnadze, arriving in Vienna for talks Thursday with his French counter part, Roland Dumas, was asked about prospects for a breakthrough. “It’s difficult to talk about new ideas. 1 have not brought any ready made concept with me,” Shevard nadze said. “Nobody has one.” At the United Nations, diplomats said the five permanent Security Council members had reached gen eral agreement on a measure that would allow nations hurt economically by the invasion of Kuwait to seek com pensation from Iraq. The British, French, Soviet, Chi ncsc and U.S. ambassadors presented the draft to the other 10 council members Thursday after settling on a text in closed-door consultations. Under the measure, countries could apply for compensation out of Iraq’s frozen assets or against its future oil earnings, diplomats said. No formal council meeting has yet been set to consider it. U.N. Secretary-General Javier Perez dc Cuellar, meanwhile, was quoted Thursday as saying hopes for a peace ful solution appeared dim. “The U.N. Charter’s Article 42 permits military action,” he told the German news magazine Stem. “Should the Security Council come to that decision, that would be completely legal.” Nineteen-year-old runs for justice of the peace PLANO, Texas - A rookie poli tician just graduated from high school, but he already may be draw ing the most attention to the office of justice of the peace since Judge Roy Bean and his six-guns. In March, while still a senior, 18-ycar-old John Payton defeated 50-year-old incumbent Jim Mur rell in the Republican primary. There is no Democratic candi date on the Nov. 6 ballot, so Payton is assured of victory unless Murrell is successful with a write-in cam paign he’s waging to hold on to the 537,944-a-ycar job. “I didn’t take him seriously, but I am certainly capable of running a campaign,” said Murrell, who lost 6,549-to-6,029 in the primary. Justices of the peace perform weddings, issue warrants and con duct trials on criminal and small claims eases. Perhaps the most well known Texas JP was Bean, whose court was the Jersey Lily Saloon in Langtry. Peace justices don’t have to be lawyers and the age requirement is only 18, so Payton chose the job for his first foray into politics, which he wants to make his career. “I went out there the old fash ioned way and worked for it,” said Payton, whose 19th birthday is Jan. 23. He’s now a political science major at Collin County Commu nity College in this town just north of Dallas. Murrell says he learned a lesson i--- ■ from his primary loss. “Wc arc doing everything that we know how to do to contact voters,” Murrell said. ‘‘We’re talking about our age. education, time in the area ... the experience 1 have as justice of the peace, teaching, instructing and community service,” Murrell said. He’s also asking reporters to check whether Payton had to make up classes and was fired from his part-time job in the grill at Chase Oaks Golf Course. Lynn Coker in the school regis trar’s office said she couldn't re lease Payton’s record without his permission. Payton said he needed to take extra courses because he transferred from Maryland during his junior year. Golf course manager Gary Black said Payton wasn’t fired and was a ' good employee for the three months he worked there. “He just basically said he did | not have enough lime to do his jof and run his campaign and try to do a good job as a justice of the peace candidate,” Black said. Payton has promised to conduct night court and weekend weddings He also has attacked Murrell as a college dropout. Murrell said ministers conduct weekend weddings and says night court would cost a minimum ol $1{X),(XX). Murrell acknowledges he never finished college, but says he has a wealth of life experience vital to the job. ----—i Nebraskan j Editor Eric Planner Professional Adviser Don Walton | 472-1766 473-7301 Sj nralk- MnlnifumDcS^S 144 08°) '• published by the UNL Publications Board. Ne I weekly dumg summer NE M°nday thr°Uflh Fnday durin® Ihe aCadem C ^ I nhnn?nn ar73ai7^<S^9ed «° subm,t s,or* ldeas and comments to the Daily Nebraskan by H a«S« be.twee" 9 am anfl5Pm Monday through Friday The public also has V Subs«mt?nn rnir^f F°r in,0rmall°". contact Bill Vobejda* 436 9993 §| buDscnption price is $45 for one yea' K St L?n8<£lnSNF 5M!2n£Bn8" 10 lhe Daily Nebraskan. 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