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Section B • Page 8
The University Daily Kansan
Nation/World
Thursday, March 29, 2001
For comments, contact J. R. Mendoza at 864-4810 or e-mail editor@kansan.com
The Associated Press
LOS ANGELES — Sharply higher electricity rates for millions of Californians mean customers at Tom Creedon's seafood restaurant will be paying more for their Dungeness cracked crab or steamed clams bordelaise.
"When you add another 15 or 20 percent to the electricity bill, it is something we are going to have to pass on to customers," said Creedon, who already has seen the monthly natural gas and electricity bills at his San Francisco restaurant rise by $3,000.
Rising costs of food, entertainment and tourism are part of the expected ripple effect from an electricity rate hike approved Tuesday by state regulators.
The rate increase of up to 46 percent for millions of customers of the state's two biggest utilities comes on top of an average increase of 10 percent in January and a 10 percent rate rollback that will expire next year.
The increases are the latest fallout from California's failed bid at electricity deregulation and are meant to shore up its debt-ridden utilities. Southern California Edison and Pacific Gas & Electric say they have lost nearly $13 billion in debt, in part because the state's 1996 deregulation law barred them from passing along rising wholesale electricity costs
so much."
"You do whatever you have to do to make ends meet.I've got seven kids, so you can only cut back
Frank Howell
Fresno, Calif., resident
to customers.
Natural gas bills already have more than doubled in many parts of the state, reflecting a nationwide increase in wholesale gas costs.
Business leaders warn they will have to pass those costs to their customers, leading analysts to warn of inflation that could spread beyond the state.
"It is going to be painful," said Jack Kyser, chief economist for the Los Angeles Economic Development Corp.
California's $1.3 trillion economy accounts for 13 percent of the nation's gross domestic product and 16 percent of U.S. consumer demand.
"Remember that trends start in California," Kyser said. "I think this is definitely going to create inflation pressures."
He said the most immediate effect would come from the bot.
tom, with people spending less on eating out, going to the movies and buying at the mall.
Frank Howell, who lives in Fresno with his wife and seven children, paid more than $800 last month for natural gas and electricity for his home, compared with $350 a year ago.
But Howell also owns a small air conditioning installation business, and he is hoping summer demand for his services will offset any need to save.
"You do whatever you have to do to make ends meet," said Howell, a PG&E customer. "I've got seven kids, so you can only cut back so much."
Creedon said fewer regular customers coming to his Fisherman's Wharf restaurant were not his only worry.
His Scoma's Restaurant has become a draw for tourists, who Creedon fears will avoid California because of the rolling blackouts.
"It's the same thing as when we had the earthquake in 1989," said Creedon, referring to the Bay Area earthquake that killed 63 and caused $10 billion in damage. "People thought San Francisco was in shambles."
Small businesses are more at risk, economists said, because energy does not account for much of larger manufacturer's costs.
"Some people are going to wind
up having difficulties, and some people who are on the margin, this will push them over," said economics professor Robert Michaels of California State-Fullerton.
Intense competition in a slowing national economy could prevent some companies from charging higher prices and may force some to lay off employees or move.
"Right now we are examining our options," said Dick Campbell, who runs a plastic molding business in Corona, about 50 miles east of Los Angeles. The 50-person company serves Boeing and Procter & Gamble. Relocation may be the only option.
"My customers can easily go to someone who is not paying 40 percent more for power. That puts us at a distinct disadvantage because that is going to come out of the bottom line, and there is nothing we can do about it," he said.
Although some businesses might decide to move, the California Chamber of Commerce hopes the rate hike will actually help by forcing ratepayers to conserve and thus creating more stable energy supplies.
"Rolling blackouts are not acceptable to Silicon Valley," said Kathy Fairbanks, chamber vice president. "No one wanted to see a price increase, but employers would say that reliability would be more important to keeping their businesses open."
Proposal progressing
House backs Bush's budget blueprint
The Associated Press
WASHINGTON — Republicans overwhelmed the Democrats and pushed a $1.94 trillion budget for 2002 through the House yesterday, as President Bush's blueprint for tax cuts and curtailed spending cleared its first major congressional hurdle.
The vote was a near party-line 222-205. Though devoid of suspense because of the GOP's thin but unified majority, Republicans hailed their victory as a triumph for their view of government.
year, $1.6 trillion tax cut is too big and his proposed spending restraints too stingy.
"The choice is between two visions," said House Majority Leader Dick Armey, R-Texas. "A vision of bigger and bigger government, a choice between larger and larger taxes or a choice of smaller government that trusts the people."
The House roll call, though, was but a warmup for a rougher test next week in the evenly divided Senate. There, the GOP not only faces near-lockstep Democratic opposition, but some moderate Republicans have said Bush's 10-
Even so, Bush said the House action made yesterday "a big day" and said the budget's centerpiece — an across-the-board cut in income tax rates — would help all Americans.
"We need to cut all rates so that there's certainty in our economy when people plan, and I'm confident we can get this done," he said before meeting with GOP congressional leaders.
Bush: Proposed bud:
get passes House,
Senate awaits
Hoping to claim the economic stimulus argument as their own, House Democrats joined their Senate colleagues and said they wanted a $60 billion tax reduction effective this year. If moved as a separate bill—instead of attached to Bush's big tax cuts, as
Republicans insist—the measure could zip through Congress in a day, Democrats said.
"But they refuse to do it because they have an obsession with a year-old tax plan, like a dog after a bone," House Minority Leader Dick Gephardt, D-Mo., said referring to Bush's plan.
Senate Republicans have said they favored a $60 billion tax cut for this year, but have yet to determine all the details. House GOP leaders remain undecided on the size and shape of a package meant to stimulate the economy. A final figure will be set in the final congressional budget, which House-Senate bargainers hope to complete next month.
Besides its tax reduction, the House GOP budget envisions $2.3 trillion in debt reduction during the coming decade, using parts of the Social Security and Medicare surpluses to overhaul both programs, and limiting many programs to 4 percent growth next year. That would be half this year's increase.
Besides drawing Democratic
fire, Bush's fiscal plans have prompted calls from some Republicans for deeper tax cuts and added spending for defense, farms and special education. But participants in yesterday's White House session said while Bush seemed open to changing details of his budget and tax plan, he was sticking to its basic principles, including the $1.6 trillion tax cut.
House Speaker Dennis Hastert,
R-III, described Bush's message to
the lawmakers: "Stay the route.
Get this thing done."
Democrats said the GOP budget would squander the $5.6 trillion federal surplus projected during the next decade, largely to cut taxes for the rich. They said it would shortchange other priorities like schools and new prescription drug coverage, risk a return to budget deficits, and do nothing to buttress Social Security and Medicare for the retirement of baby boomers.
Republicans said their plan was a sound use of federal resources and would lay the groundwork for overdue tax cuts.
Mexican rebels proclaim start of political struggle
The Associated Press
MEXICO CITY — Leaving behind their jungle hideouts and guns — and their controversial leader — 23 skil-masked Zapatista rebels strode yesterday onto the floor of Congress and proclaimed the beginning of a political struggle.
Rebel leader Comandante Esther said the absence of Subcomandante Marcos, the rebels' military leader and media star, was intentional: the rebels' military mission had ended, she said.
"Our warriors have done their job. Now it is our time for respect." Esther told hundreds of legislators. "The person speaking to you is not the military leader of a rebel army, but the political leadership of a legitimate movement."
For the first time, the Zapatistas
acknowledged the peace overtures made by President Vicente Fox, who had bent backward to meet to their demands.
"His orders have been a sign of peace.
She said they had ordered Subcomandante Marcos not to make any military advances on army bases Fox has ordered closed in Chiapas. The closures were part of a list of rebel demands for restarting peace talks.
The argument about letting the rebels take the floor created a bitter division within Mexico's newly independent Congress — and within the National Action Party. Its members claimed the rebel's past rhetoric suggested they had come to lecture, not engage in a dialogue.
With National Action blocking a full joint session of Congress, the rebel leaders took...
"Our warriors have done their job. Now is our time for respect."
Comandante Esther
Zapatista Rebel Leader
Esther continued to suggest the rebels still had a military capacity, something experts doubt.
become a trademark of their movement, anger many lawmakers who say the rebels should show their faces.
We, too, will give orders of peace to our people," Esther said.
"It is symbolic that I, a poor Indian woman and a Zapatista, am here today." Esther said.
She and a string of rebel commanders described 500 years of repression against Indians and argued for approval of a rights bill now before Congress.
That campaign has been so successful, and the rebels so unyielding, that some legislators accused them of trying to bully congress.
While no longer a military threat, the rebels have mounted a successful media campaign to demand Mexico rethink its treatment of its 10 million Indians.
"Our word is one of respect," said Esther, who like other rebel leaders uses only her first name. "We came to have a dialogue...not to shove anyone aside."
But she went on to attack Fox's National Action Party, which opposed their appearance in Congress. Many of the party's members didn't show up for the session.
About 100 of the 628 senators and congressmen were present, and they gave the rebels a rousing applause. Congressional workers said more legislators were expected to join the hours-long session later.
The rebel leaders all wore black ski masks under beribboned Indian hats and military field caps. The masks, which have
technically addressed a committee meeting in the main chamber of Congress. The absence of Marcos — whose biting rhetoric had angered some congressmen —
indicated a more conciliatory tone on the part of the rebels.
"Subcomandante Marcos is just that, a subcommander. We are the ones who lead, as a group," Esther said, referring to the other Indian rebels. Marcos is not an Indian, though he claims elders have given him that status.
Rarely if ever has a guerrilla movement gained so much while posing such a small military threat. Actual fighting lasted only 12 days seven years ago. More than 145 people died before a cease-fire took hold.
But since taking office Dec. 1, ending 71 years of single-party rule, Fox has reversed the former ruling party's policy of isolating the rebels deep in Chiapas state. Fox has agreed to meet all of their demands, but the Zapatistas have refused to meet with him.
At issue is constitutional amendments that would allow Indians to govern themselves at the local level, promote their own languages, customs and justice systems, and grant them greater land rights.
Critics worry the law could allow traditional Indian councils of elders to discriminate against women, political or religious minorities, or to take control of nature reserves for farming.
The rebels have been loath to accept any changes in the bill, and accused congressmen of being "racists" and "cavemen."
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