NATION

U.S.-Japan Trade Talks Fail

President Clinton and Japanese Prime Minister Morihiro Hosokawa, meeting in Washington, failed to reach an agreement on trade. The Administration had sought "objective standards" by which the opening of the Japanese market to U.S. companies could be measured. But Hosokawa said Clinton's request would lead to "managed trade." Clinton conceded, "I have no idea what will happen from here on in. This is a serious problem."

Clinton Releases Tight Budget

President Clinton sent a proposed $1.5 trillion budget to Congress that forecasts a deficit of $176 billion. Severely restricted by congressionally mandated limits, the budget increases just 2.3%, and only 36% of the total is discretionary spending. That brings government spending, as a percentage of the national economy, to its lowest level since 1979. Prominently absent: the cost of Clinton's health-care plan.

U.S. and Aristide Bicker

After four Haitian refugees were found drowned off the coast of Florida, ousted Haitian President Jean-Bertrand Aristide denounced the U.S. policy of forcing Haitian boat people to return to their country, calling the policy a "floating Berlin Wall."

Tailhook: It's Over

A Navy judge dismissed the final three cases arising out of the Tailhook scandal, claiming that they had been tainted by the actions of Admiral Frank B. Kelso II, Chief of Naval Operations; a fourth case was dismissed because of insufficient evidence. Kelso, the judge said, witnessed debauched behavior at the 1991 Tailhook convention and then tried to cover up his knowledge of the affair. Kelso denies being aware of any improprieties.

Hutchison Cleared

Texas Senator Kay Bailey Hutchison was cleared of ethics charges after the judge refused to rule before the trial on the admissibility of evidence seized in a raid of the state treasury offices. Faced with the judge's decision, the prosecutors declined to go ahead with their case.

Tonya Scores

The U.S. Olympic Committee struck a deal that allows Tonya Harding to compete in the Winter Games. In exchange, she will drop a $25 million lawsuit. However, Harding could still be disciplined after the Games in connection with the attack on Nancy Kerrigan.

Smoking Ban Wins Support

The Clinton Administration announced its support for legislation that would ban smoking in all buildings open to the public--including bars, stores and offices. Residences are excluded.

Talbott Grilled by Senate

President Clinton's nominee for Deputy Secretary of State, Strobe Talbott, underwent semitough questioning by the Senate Foreign Relations Committee about several articles critical of Israel that he wrote during his 22-year career at Time magazine. Explaining that he had changed his views on "many" subjects, Talbott said, "I have always believed that a strong Israel is in America's interest."

The Plague Goes On

On top of the fires and earthquake, the beleaguered citizens of Malibu had to endure mudslides caused by two days of heavy rains in Southern California.

Winter Asserts Its Power

Snow and freezing rain disrupted lives in large areas of the eastern U.S. In Washington much of the Federal Government was closed on Friday, and in New York City, which got more than a foot of snow, the stock exchange closed early.

Term-Limit Law Struck Down

A federal judge in Seattle ruled unconstitutional a Washington state law limiting the number of times that congressional members can have their names on a ballot (a de facto term-limit law). The case will probably be appealed to the Supreme Court; 14 other states have term-limit laws.

Courtroom Roundup

In New York City the prosecution rested its case in the conspiracy trial of four defendants charged with bombing the World Trade Center; the defense team is expected to complete its presentation within days. Meanwhile, in Santa Barbara, California, the grand jury in the child-molestation investigation of Michael Jackson heard testimony from its first witnesses, including actor Marlon Brando's son Miko, who has worked as a Jackson bodyguard.

New Rules Proposed for Pilots

Prompted by a crash that killed 18 people in Minnesota last December, the Federal Aviation Administration proposed that pilots of commuter planes with 10 or more seats be required to undergo the same safety training as pilots for airliners. The rules would take effect in about 18 months.

WORLD

This Time, We Mean Business

Withdraw your guns or face our bombs. That was the essence of NATO's message to Bosnian Serbs, issued after a tense 14-hour meeting at NATO headquarters in Brussels. The ultimatum gave Serbian forces 10 days to pull back the mortars and heavy guns they have used to encircle Sarajevo for the past 22 months. The deadline: next Monday. By week's end a tentative cease-fire appeared to be holding.

Trouble in South Africa

During a week in which Nelson Mandela registered his African National Congress to participate in South Africa's first-ever all-race elections, several parties decided to boycott the vote. The Freedom Alliance, an umbrella group of black and conservative white organizations, all of whom are demanding autonomous regions of their own in the new South Africa, failed to register in time to participate in the April balloting. At least 14 parties will compete in the election.

Waiting Game

When Israel and the P.L.O. first signed their in-principle peace agreement in September, the details of its first stage, self-rule in the Gaza Strip and Jericho, were supposed to take just one month to negotiate. Last week Israeli Foreign Minister Shimon Peres and P.L.O. Chairman Yasser Arafat signed a partial deal in Cairo that resolved several disagreements but left unresolved such important issues as economic relations and the exact size of the Jericho enclave.

Agony in Sudan

After more than 10 years of civil war, hundreds of thousands of Sudanese are now facing severe drought and renewed fighting as mainly Christian rebels from the southern portion of the country battle offensives from the Islamic fundamentalist government in the North. Last week a report submitted to the U.N. cataloged cases in which both government and rebel forces have massacred civilians, tortured prisoners and kidnapped children for use as slaves or soldiers.

Anger in Warsaw

To express their fury at declining living standards, some 30,000 Polish workers from around the country converged on Warsaw and marched through sleet and snow in one of the largest demonstrations the country has seen since the fall of communism.

U.S. Recognizes Macedonia

Despite Greek objections, the U.S. recognized the former Yugoslav republic of Macedonia as an independent state. Greece fears that the new republic may lay claim to part of the contiguous Greek province of Macedonia.

Finnish Line

In Finland's first direct presidential elections since the country gained independence from Russia in 1917, a former U.N. mediator has won the presidency. Martti Ahtisaari, 56, owes his ballotbox victory primarily to promises to battle recession. Now in its third year, Finland's present economic slump is its worst in 60 years.

BUSINESS

Sculley Sues, and Gets Sued

John Sculley, former chairman of Apple Computer, abruptly left his new job as head of Spectrum Information Technologies, charging Spectrum's chairman Peter Caserta with fraud. Sculley's $10 million lawsuit claims Caserta failed to mention anything to him about an ongoing sec investigation. In turn, Spectra has brought a $300 million countersuit against Sculley for breach of contract.

Two Software Giants Merge

Electronic Arts, a leading producer of games for personal computers and video-game machines, announced it will acquire Broderbund Software in a $400 million stock swap. Broderbund, specializing in educational software, made its name with the phenomenally popular Where in the World Is Carmen Sandiego?

Airwave Auction

The Clinton Administration will permit commercial users to take over a large chunk of the radio band that is now controlled by the Pentagon and other federal agencies. The auctioning of 200 megahertz worth of airspace will take 10 years to complete and could raise as much as $7 billion in revenue for the government.

THE ARTS & MEDIA

The Boot

Kathleen Battle, the famously temperamental soprano, was summarily fired by New York's Metropolitan Opera. Reason: "unprofessional actions" during rehearsals for Donizetti's La Fille du Regiment. Battle said she was "saddened" by the decision.

Found and Lost

Undercover police posing as art buyers recovered the 16th century painting by the Italian Renaissance master Raphael known both as The Madonna with Child and Lamb and The Madonna of the Hay. The canvas, never publicly exhibited, disappeared in the early 1880s. After agreeing to pay $24 million for it, the police reportedly detained five businessmen and art dealers. But just as the art world got one masterpiece back, it lost another. Edvard Munch's painting The Scream was stolen from the National Art Museum in Oslo. It had been on display as part of a Munch exhibition in conjunction with the Lillehammer Olympics.

Oscars for Oskar (Schindler)?

Steven Spielberg, Hollywood's perennial also-ran on Academy Award night, may finally win the big prize: his movie, the acclaimed Schindler's List, got 12 nominations, including Best Picture and Best Director. Other contenders for Best Picture: The Fugitive, In the Name of the Father, The Piano and The Remains of the Day. Two actresses were double-listed: Emma Thompson (as Best Actress for Remains of the Day and Supporting Actress for In the Name of the Father) and Holly Hunter (Best Actress for The Piano, Supporting Actress for The Firm).

By Christopher John Farley, Wendy King, Jeffery C. Rubin, Alain L. Sanders, Anastasia Toufexis, Sidney Urquhart

ZHIRINOVSKY BEAT

Russia's top ultranationalist was up to his neck last week in forceful pronouncements and manly winter sports:

Wednesday: In an interview with a Czech newspaper, Zhirinovsky warned that Czechs "will be forced to...clean the shoes of German officers"...Thursday: Visiting St. Petersburg, he claimed to have rejected a $1 billion bribe from an Asian country to help it "get some islands." He also vowed that "barbarian peoples" in southern Russia would have their villages destroyed by napalm...Sunday: He planned to take part in a vigorous 40-km (25-mile) cross-country skiing competition in Moscow.

DISPATCHES

THE ULTIMATE HEALTH-CARE STORY

By MARC HEQUET, in Rochester, Minnesota

DeWayne Murphy, also known as Prisoner 06764-045, won't step outside during winter: the frigid Minnesota air leaves him gasping. His sleep is plagued by night sweats and cramps. "They sent me here to be rehabilitated," he says of the Rochester Federal Medical Facility, where he is incarcerated. "But how can you be rehabilitated if you die?"

He's got a point. Though Murphy is just a first-time felon serving a mandatory four-year sentence for drug possession, the ailing 33-year-old inmate finds himself on a kind of de facto death row; his weakened heart has one-sixth its normal pumping power. He needs a transplant.

New hearts are difficult for anyone to come by; for inmates, it's even harder. The U.S. Bureau of Prisons doesn't pay for transplants. Medicare will pay--if Murphy is released. The bureau will release Murphy--if a doctor accepts him for the necessary pre-transplant work-up. But no doctor will take him--unless he's released.

It may sound like a somewhat heavy-handed lampoon of the American health-care system--bad Joseph Heller, say. It gets worse. If Murphy is furloughed for the prolonged pre-transplant regimen, afterward he would return to prison. Would he be furloughed promptly again if a heart became available unexpectedly, as donor hearts are wont to do? The Bureau of Prisons says he would be. Murphy has his doubts. Doctors see a logistical snarl that could hopelessly compromise the success of the transplant. The authorities shrug. "The Bureau of Prisons doesn't have a hang-up," explains Robert McFadden, executive assistant to the warden at Rochester. "When we're presented with the information we request, we can go forward."

Murphy's troubles started in 1990, when he was fired from his job as a warehouse foreman in Kansas City, Missouri, for being sick too much. Suffering from what he thought was pneumonia, he got a chest X ray, which showed that his heart was greatly enlarged. He was told he would need a transplant and placed in intensive care.

Murphy improved just enough to be released. Divorced, broke and sick, he was arrested with a bag of methamphetamine in his home in 1991. He says he was merely keeping it for a friend, though in anticipation of being paid for doing so.

Pudgy, stringy-haired, constantly out of breath, Murphy has deteriorated since he was incarcerated in March 1993. A local attorney has filed suit against the Bureau of Prisons seeking his release, but Murphy doesn't really have time for a protracted legal battle. When he arrived at Rochester, he says, he could walk a lap or two on the prison track. Now he's winded after climbing down a flight of stairs. He must sleep virtually sitting up, and gets oxygen all night. He fears that a heart attack or stroke could leave him on life support rather than kill him outright. "Serving a four-year sentence on life support," Murphy shudders. "That's scary." Ironically, his life seeps away just minutes from the Mayo Clinic, home to a world-famous heart-transplant program. "It drives me crazy," he says. He stops to breathe. "I'm sitting here dying, and there's nothin' I can do about it."

HEALTH REPORT

THE GOOD NEWS

-- Peptic ulcers can be cured, not just treated, with antibiotics, reports the National Institutes of Health. A special panel has concluded that the bacterium Helicobacter pylori causes ulcers and can be wiped out by a combination of drugs such as tetracycline, metronidazole and amoxicillin.

-- Many elderly women fail to perform breast self-exams because of arthritis, failing eyesight or loss of feeling in the fingers. Now a researcher has developed an alternative self-exam: the woman lies down and uses the palm of her hand to sweep over the breast, a more comfortable technique than the usual one of standing in front of a mirror and using the fingertips on the breast. In addition, women with poor eyesight can use a hand-held magnifying mirror to look for lumps.

THE BAD NEWS

-- Baby boomers have a much greater chance of getting cancer than their grandparents did at the same age, says a new federal study. Researchers don't think the higher risk is due to smoking or better diagnostic methods but believe it is probably the result of still unrecognized cancer-causing chemicals in the environment.

-- Smoking cigarettes not only raises the risk of lung cancer and heart disease but also causes damaging bone loss in women. A new study, based on 41 pairs of female twins, has found that women who smoke a pack a day through adulthood reach menopause with bones that are up to 10% less dense than those of nonsmokers--and more vulnerable to fractures. Researchers speculate that smoking interferes with the body's estrogen production.

PUTTING OUT FIRES WITH GASOLINE

"I owned an El Camino pickup in the '70s. It was a real sort of Southern deal. I had Astroturf in the back. You don't want to know why, but I did."--PRESIDENT CLINTON, WHILE TOURING A PICKUP-TRUCK FACTORY

MAKE BIG BUCKS THE NATURAL-DI$ASTER WAY

Heroic rescues, food-stamp fraud, heartwarming acts of charity, price gouging a major natural disaster like last month's Los Angeles earthquake can bring out the best as well as the worst in victims. A compendium of bad postcalamity behavior:

LOS ANGELES EARTHQUAKE

Over 50,000 survivors have applied for food stamps, and rampant cheating is suspected. Relief workers have imposed a 72-hour waiting period to cross-check names and addresses. Complaints are also rising about landlords who refuse to refund rents and security deposits on condemned apartments.

SUMMER '93 MIDWEST FLOODS

Out of 7,349 Kansas City, Missouri, households receiving food stamps, one-third were found to be not entitled. Aid workers were forced to close down the program and later announced an amnesty to persuade impostors to turn in their ill-gotten stamps. Other abuses: a 600% price hike for towing mobile homes to higher ground; flood-damaged, though perfunctorily spruced-up autos pouring into used-car lots.

HURRICANE ANDREW

South Florida saw widespread price gouging in the form of $4 candy bars and $6 cans of baby formula. One store would not sell batteries without the purchase of a TV or radio. A woman filed for an $11,500 loss of household goods, but the address she gave investigators turned out to be in Biscayne Bay. A farmer submitted a photo of someone else's destroyed mobile home and a claim of $19,440; investigators later found his actual, undamaged trailer in Tampa, clear across the state.

INSIDE JERUSALEM

ISRAEL: SYRIANS FIRST, PALESTINIANS LATER

Israeli Prime Minister yitzhak rabin is in no hurry to finalize negotiations with the Palestinians. That's because he wants a Syrian deal first, says one of Rabin's Cabinet ministers. Rabin has told his inner Cabinet that the U.S. is working to create a loose alliance of countries in the Middle East to counterbalance Iran and Iraq. Thus, normalized relations between Israel and Syria are of primary importance. Says the source: "Rabin will give the entire Golan Heights back to the Syrians. As difficult as it is, he's made up his mind to do it."

WINNERS

JIM CARREY

His very, very zany Ace Ventura is an unlikely box-office No.1

SENATOR KAY HUTCHISON

Legal wrangling over evidence leads to ethics-charge acquittal

DANIEL N. HELLER

Miami lawyer wins $500,000 IRS harassment "apology"

LOSERS

JOHN SCULLEY

Blue-chip executive quits new job, alleging he was suckered

KATHLEEN BATTLE

The Met fires the temperamental soprano for being diva-like

THE U.S. AND JAPAN

Clinton and Hosokawa spar publicly as summit trade talks crash

NEWS FLASH! POLITICIANS COVER THEIR REARS!

Some legislators are hedging their bets on the health-care debate by co-sponsoring more than one of the three most prominent proposals: the Clinton bill; its chief rival, the Cooper bill (similar to the President's but without universal coverage); and the McDermott bill (nationalized health care).

Rep. Sam Gejdenson (D., Conn.)

Co-sponsor: Clinton, McDermott

Rationalization: "My basic call is that there are a number of approaches to solve this problem."

Rep. David Minge (D., Minn.)

Co-sponsor: Clinton, Cooper

Rationalization: "I wanted to support more than one to show my commitment to [health-care reform]."

Rep. Patsy Mink (D., Hawaii)

Co-sponsor: Clinton, McDermott

Rationalization: "I want to make sure that we have a bill."

Rep. Martin Olav Sabo (D., Minn.)

Co-sponsor: all three

Rationalization: "I am a strong supporter of universality, and I also have a deep respect for the work Jim Cooper did over the years on health care."

Rep. Mike Synar (D., Okla.)

Co-sponsor: all three

Rationalization: "All three...are major steps in the right direction. I'm trying to be a conduit between the three different ideas so we can have a good idea that can accomplish the goals that the President set."

IT'S A WONK THING--YOU WOULDN'T UNDERSTAND

"You can laugh, my fellow Republicans, but I'll point out that the Congressional Budget Office was normally more conservative in what was going to happen and closer to right than previous Presidents have been."

Bill Clinton before a joint session of Congress, Feb. 17, 1993

"Oh, we'll fix that. That's not a problem. That's a Washington policy wonk deal."

Clinton on Feb. 8, 1994, after the CBO said his health-care plan would increase, not decrease, the deficit

INFORMED SOURCES

JUSTICE DEPARTMENT MAY BE CAUGHT IN WEBB

Washington--Associate Attorney General Webster Hubbell is snarling communications between the Justice Department and the White House, claim sources at the department. Hubbell is Hillary Clinton's former law partner and Bill Clinton's golfing buddy and functions as Attorney General Janet Reno's link with the White House. But the big-picture Hubbell tends to focus on issues that interest him and lets crucial details fall through the cracks. Justice aides say that's one reason the White House is sniping about being blindsided by Reno.

WHAT IS NORTH KOREA DOING WITH ITS PLUTONIUM?

Washington--The international Atomic Energy agency will circulate a report this week detailing the agency's unsuccessful negotiations with North Korea over nuclear safeguards. Barring an eleventh-hour breakthrough, the report will say that those safeguards have broken down and that the IAEA is no longer sure what North Korea is doing with its plutonium stockpile. The iaea is likely to force the issue and refer the matter to the U.N. Security Council, which will then have to decide whether to impose sanctions on North Korea. Pyongyang has threatened to treat sanctions as an act of war.

CHINA'S GRUMPY OLD MEN

Hong Kong--Aged Chinese leader Deng Xiaoping, who finally made an official appearance in Shanghai last week after being out of the public eye for almost a year, is the focus of much silly gossip over what seems to be a battle between him and rival Communist Party elder Chen Yun to see who can maintain his faculties longer. A source close to Deng's inner circle tells this story: the 89-year-old Deng can no longer write but can walk 50 steps; the 88-year-old Chen can write but can walk only 30 steps. Says the source: "Deng is so feeble, taking him out in public has become an enormous production."

AND YOU THOUGHT THOSE ROYALS WERE NAUGHTY...

"Time to get back to basics," said Britain's Prime Minister John Major four months ago at the Conservative Party annual conference. But some of his fellow Tories weren't listening to Major's pitch for family values. Only last week, Conservative M.P. Stephen Milligan was found dead in his apartment. He was wearing women's stockings and a garter belt and had a plastic bag over his head and an orange in his mouth. (Scotland Yard believes Milligan's death may have been due to self-strangulation while indulging in a solitary sexual practice.) Some other recent Tory peccadilloes:

The Earl of Caithness, Transport Minister, resigns his post just before his in-laws reveal the reason for his wife's recent suicide: his affair with former secretary to Princess Anne, Jan Fitzalan-Howard.

The wife of Conservative M.P. David Ashby announces that he has left her for another man. Ashby admits to "sharing beds with dozens of men" but not for the purposes of having homosexual relationships. Rather, he places the impetus on the accommodations in "bloody French hotels."

Environment Minister Tim Yeo resigns after admitting to being the father of a five-month-old "love child" (Fleet Street's formulation, not his own) born to his mistress, a north London Conservative Party worker.