PAUL KANGAS: Call it the economic stimulus plan that refuses to die, or for that matter, refuses to live. Partisan wrangling on Capitol Hill continues to tie up progress on an economic package, and as Stephanie Woods reports, today the politicking came right from the top.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: At a meeting on Capitol Hill this morning, President Bush announced a stimulus deal had been reached.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This bill can pass both bodies. This bill will pass the House, it's got enough votes to pass the Senate, and therefore I look forward to working with both bodies in any way I can to convince those who are reluctant to get a bill done, that this makes sense for America.

WOODS: But the bill the president was talking about was one agreed to mostly by Republicans and a few centrist Democrats. Later in the morning, Senate Majority Leader Thomas Daschle said he knew of no plan that had the necessary votes. Still, Daschle too held out hope a deal could be reached.

SEN. TOM DASCHLE, MAJORITY LEADER: So we're frustrated, but we're not going to give up. We're disappointed that we've not been able to achieve our goal, but we're simply going to stay at the table for as long as it takes to get this job done, as long as our Republican colleagues will continue to talk.

WOODS: Negotiations broke down over the issue of how best to help unemployed workers pay for health benefits. Republicans want to give tax cuts so individuals can buy their own insurance. Democrats want workers to get insurance through their former employers. Analyst Kim Wallace calls the political rhetoric a head fake.

KIM WALLACE, POLITICAL ANALYST, LEHMAN BROTHERS: The two sides have been talking past each other, and at the same time they've been unwilling to be the first to come out and announce that these negotiations have stalled and they are going to be unable to conclude them. And no one wants to deliver bad news, so they will continue to say that they're talking right until the time they are boarding planes and leaving for the Christmas recess.

WOODS: But analysts say a political stalemate may produce the best policy. They point out that if the economy comes out of recession quickly, a $100 billion stimulus package isn't needed. And if Congress wants to help unemployed workers, it can still do so early next year. Stephanie Woods, "NIGHTLY BUSINESS REPORT," Washington.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

12/19/01: Treasury Secretary Paul O'Neill Sounds Off On The Stimulus Plan Stalemate

JEFF YASTINE: The administration's point man on economic stimulus is not giving up hope of getting a package passed this year. In an interview with Washington bureau chief Darren Gersh, Treasury Secretary Paul O'Neill says he does not think Congress will leave for Christmas without helping unemployed workers. O'Neill has been criticized by conservatives for not pushing hard enough for tax cuts, but he says Senate Democrats are blocking action.

PAUL O'NEILL, TREASURY SECRETARY: I find it really difficult to believe that on a partisan vote where it's a minority that thwarts the process, that the minority is really going to turn down providing assistance to people who've been thrown out of work by the events of September the 11th.

YASTINE: Well,the bond market may be happy the stimulus package is in trouble, but Treasury Secretary Paul O'Neill is not. O'Neill says a majority of senators support a stimulus plan. Washington bureau chief Darren Gersh asked O'Neill about the chances an agreement can still be reached.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Senate Majority Leader Daschle says, look, under long-standing Senate rules, any time you get in a situation where you are going to have deficit spending, which is what the stimulus would spark, you have to have 60 votes to get it through. And they say that the plan that the president is backing today, and is going to come out of the House, doesn't have the 60 votes and therefore won't pass and shouldn't pass.

PAUL O'NEILL, TREASURY SECRETARY: We'll see. There is one issue where again it's hard for me to believe we're not going to come into agreement. What the president has recommended in this centrist bill that is now center of attention is that we the federal government provide a tax refund to people who are put out of work after September 11th that provides up to 60 percent of the cost of healthcare insurance for the individual and their family. And what the president has recommended would not discriminate between people who worked for big companies or small companies, and it wouldn't leave some people behind. But the bill proposed by the Democrats would only take care of maybe 50 percent of the people directly. The other 50 percent would be thrown into the clutches of an uncertainty of 50 states acting on a new Medicaid provision to create a new entitlement program. I just can't believe this is going to fail because the Democrats won't agree to do the right thing.

GERSH: That is interesting you bring that up, because that is a key sticking. And Democrats (ph) argue about, look, we have an employer-based system, basically where most people get their healthcare, and there's no guarantees that there's going to be an individual market. It probably won't would work. Why are they wrong on that?

O'NEILL: Well, because in the case of what they're proposing, only about 50 percent of the people would have a continuation of plan from their previous employer because lots of employers don't have a plan. Under the president's plan every individual - the difference is really - the difference between providing an individual direct entitlement to people who have been dislocated and in the Democratic proposal, dealing with a complex process of former employers and 50 different state Medicaid agencies that have never dealt with this kind of a population.

GERSH: The economists that I've spoken to say, look, if the stimulus doesn't happen, they are going to knock about 0.2 to 0.3 of a percentage point off their estimates of growth for next year. Is that in line with your estimates if we don't get a stimulus?

O'NEILL: Well, I think you can argue about how many tenths - we don't prefer to think about how many tenths of GNP. We think about it as if we don't pass this bill we're giving up the opportunity to maintain or create 300,000 new jobs. That is one person at a time, 300,000 is a huge number. We need to do this.

GERSH: If we don't do this though, if the Congress doesn't do this, are you going to be back here revisiting this issue in January and have to take it up all over again?

O'NEILL: You know, I guess I prefer not to entertain the hypothetical because I just cannot believe that a partisan minority is going to thwart the will of the majority of Congress that wants to provide investment inducements to business and tax relief to low-income and moderate-income individuals and take care of these unemployment insurance requirements and health insurance. I can't believe that the representatives of the people are going to walk out of this town for their own happy Christmas and leave all these other people stranded.

GERSH: One other thing that looks like it might get stranded is this terrorism reinsurance where the federal government would be a backstop to provide terrorism insurance. Is that going to get through? and again, if it doesn't get through, what does that do to the economy?

O'NEILL: You know, I would characterize what this terrorist risk insurance does a little bit differently. What it does is effectively insure that businesses and individuals can get coverage for the risk associated with a terrorist act. Without the legislation that has been proposed by the president, the chances are lots of businesses won't be able to get insurance and that means they won't do construction projects or they won't do expansion because there isn't a way for insurance companies to assess risk without the passage of this bill. This bill would not give one penny to any insurance company in the country. It's simply sets the rule for how companies should proceed since September 11th. Again, it's hard for me to believe that the members of Congress are going to go home and leave this problem untended because 70 percent of the policies for property and casualty expire on the thirty-first of December. And I can't believe that they can intentionally go home and look themselves in the mirror on January 1st and feel good about what they did if they leave us high and dry.

GERSH: Mr. Secretary. Thank you.

O'NEILL: My pleasure.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

12/19/01: One On One With Littelfuse CEO Howard Witt

JEFF YASTINE: A lot can happen in one year. Last year, sales at Littelfuse (LFUS) were up 25 percent. This year they're down 25 percent. This year they're down 25 percent. Tonight, in the second part of our series on how the economy is affecting the nation's chief executives, Littelfuse (LFUS) CEO Howard Witt tells Diane Eastabrook how his company has kept its spark.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: A year ago, Littelfuse was scrambling to make enough fuses for everything from cars to computers. But despite that hot demand, veteran CEO Howard Witt had an uneasy feeling.

HOWARD WITT, CHAIRMAN & CEO, LITTELFUSE: In the electronic business our distributors were beginning to take down their inventories and we saw some weakness in some of our other markets. And we at that time, in our management team, discussed that and decided to start taking some action.

EASTABROOK: Witt's instincts were right. In early 2001, sales started to drop and are now down 25 percent over last year. But Littelfuse is still profitable, something Witt attributes to a global reorganization he began with his management team late last year. The company closed two plants, axed nearly 20 percent of its workforce and eliminated excess material costs. But as Witt and his managers looked for ways to cut fat, they were careful not to cut muscle.

WITT: We did not reduce investment in our systems, in our I.S. systems. We didn't reduce our R&D because that's the lifeblood of the future. And, in fact, we increased investments in what we call our technical support group, where we design new things with our major OEMs around the globe.

EASTABROOK: With a clean balance sheet and cash on hand, Littelfuse (LFUS) is preparing for the economy's rebound. The company is looking for acquisitions that will help it grow sales within its existing businesses.

WITT: We really are looking at things that are in our base business. Now this is expanding electronic componentry that we sell to major manufacturers around the world, typically looking for things they buy in that particular market that they will buy side by side with circuit protection devices to the same customer base through the same channels of distribution.

EASTABROOK: Witt predicts the U.S. economy and Littelfuse (LFUS) will begin growing again by the middle of next year. And this executive says his team won't forget the lessons learned from this recession.

WITT: And it caused us to really rethink our business, everything we do in every site around the globe.

EASTABROOK: Diane Eastabrook, NIGHTLY BUSINESS REPORT, Des Plaines, Illinois.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

12/19/01: Money File-$10 Saved Can Be A Big Investment Earned

JEFF YASTINE: In the money file tonight, how a small financial change can make a big difference. Here's Kathy Kristof, Business Writer for the "Los Angeles Times" and author of "Investing 101."

KATHY KRISTOF, AUTHOR, "INVESTING 101": Most American workers will have a little more pocket money starting this January thanks to last year's tax law. That law incrementally cut tax rates. Americans will feel the benefit of that cut through reduced federal income tax withholding. For the average worker, this benefit will add up to just $5 or $10 a week. Naturally, that's a tiny amount, an amount most people could easily fritter away. So I have a suggestion: save it. As soon as you know how much your paycheck will increase, boost your 401(k) plan contributions by that amount, or set up an automatic savings plan with a bank, broker or mutual fund company. Adding this tiny amount to savings, particularly since it's money you're not yet used to spending, will have absolutely no impact on your life. After all, it's so little money. But if given plenty of time to grow, it can turn into so much. Consider what happens if you simply sock away this $10 weekly windfall and earn nine percent on your money over time. In 10 years, you have more than $8,400. That's a nice college savings account for your child. If you have 20 years before you tap this money, it will turn into $29,000. If you leave it alone for 30 years, you may come away with a surprising $80,000. And that's all simply because you didn't buy an extra Starbuck's (SBUX) coffee or an extra burger at McDonald's. It's easy to do because it essentially costs you nothing. It's one of the few times in life you can actually secure a big gain with absolutely no pain. I'm Kathy Kristof.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

PAUL KANGAS: Stocks on Wall Street opened moderately lower, partly because of that impasse in Congress over the economic stimulus package. Also having a negative impact were yesterday's post-market earnings warnings from ALCOA (AA), Motorola (MOT), and Micron Technology (MU). An early loss of over $3 per share in ALCOA's stock alone was responsible for nearly half of a 48-point deficit in the Dow Industrial Average at 10:00 this morning, While the NASDAQ Index posted a 27-point loss. The blue chips took a decided turn for the better with the release of a better-than-expected 0.5 percent rise in the November Index of leading economic indicators, which reinforced hopes the economy would show some decent growth by next year's third quarter, if not before. By 12:30 p.m., the Dow rebounded with a 52-point gain. The NASDAQ Index was up 3 points. The blue chip sector continued to firm up in afternoon trading as the Dow moved above the 10,000 level, but the NASDAQ market weakened considerably. The Dow Industrial Average came in with a gain of 72.10 at 10,070.49. The NASDAQ Index, however, ended with a loss of 21.87 points at 1982.89.

Big board volume moved up a little on the rally, 1.4 million shares and about a 4 to 3 ratio of up volume over down volume

The Dow Transport Index down 12.61.

While the Utilities gained nearly 9 points.

The Closing Tick practically neutral +97.

Standard & Poor's 500 up 6 2/3.

A 5 1/3-point rise in the 100.

MidCap 400 down 0.90.

And the Bridge Price Index-Futures Price Index down 2/3 of a point.

New York Stock Exchange Composite up a little over 4 1/2.

The Value Line down just about a 1 1/4.

Nearly a 3 1/2-point drop on the Russell2000 Small Cap.

And the Wilshire 5000 up 45 1/3 points.

The bond market posted solid gains for the third straight day as many investors locked in what they viewed as decent yields to dress up their portfolios before year end. The rise in the leading indicators appeared to be overshadowed by thoughts that a delay in Congress on a stimulus package could delay government spending, which might boost interest rates.

In any case, tax-free and corporates rose 1/4 to 1/2-point on average.

And the Treasury market did even better than that.

The 5-year notes up 8/32.

And the 10-year notes rising 21/32.

The 30-year bond up one full point.

And the Lehman Brothers Long-Term Treasury Bond Index up 13.83.

The blue chip sector did have a very nice rally today, up a little over 72 points in the Dow Industrial Average. But the broader market still lower by a 16 to 15 ratio. 38 more new highs for the year than new lows.

Solectron (SLR) for the second day running topped the active list, today on 31.1 million shares. Yesterday it dropped $2.71 after reporting a first quarter operating loss of $0.08. Today, however, Robertson Stevens Brokerage (ph) upgraded the stock from "market perform" to "buy" with a $15 a share target.

Calpine (CPN) edged up $0.69.

General Electric (GE) moving well over $40 with that gain of $1.06.

EMC (EMC) edged up $0.03.

And then Motorola (MOT) down $0.85. After the close yesterday, as we reported, the company warned it'll have a first quarter loss and it's laying off another 9,400 workers.

Citigroup gained $1.90 on news it's going to sell up to 20 percent of its Traveler's Property Insurance unit and then spin-off the rest to shareholders by the end of next year.

NorTel Networks (NT) down $0.54.

AT&T Wireless (AWE) dropped $0.02.

A $0.19 loss in Lucent Technologies (LU).

And Compaq Computer (CPQ), tenth in volume, down $0.09.

ALCOA (AA) down $2.28. Without that loss and this Dow stock, the Dow would have been close a 100 point gain. Of course, ALCOA, after the close yesterday, as we reported, forecast fourth quarter earnings of only a $0.10 a share. The Street was looking for $0.30 and the stock today traded as low as $34.30.

IBM (IBM) up $1.69, the second best point gainer in the down after Citigroup ©. The company is selling its optical transceiver operations to JDS Uniphase (JDSU) for $340 million in cash and stock.

Micron Technology (MU) down $1.61. After the close yesterday, as we reported, a fourth quarter loss, $0.44 a share, $0.05 worse than expected, and sales tumbled 73 percent.

Morgan Stanley Dean Witter (MWD) up $2.25. For the fifth straight quarter, the company had a decline in its profits but the earnings of $0.78 were better than expected by $0.12, but still down from $1.06 last year.

Weyerhaeuser (WY) down $0.63. The story now, Willamette Industries' (WLL) board of directors is considering Weyerhaeuser's sweetened $55 a share buyout bid.

Mirant (MIR) up $2.17. The company plans to host a conference call with analysts tomorrow afternoon when it is expected to reveal its restructuring plans.

Williams Companies (WMB) up $2.60. The company said it's going to take steps to strengthen its balance sheet.

And Hovnanian Enterprises (HOV), the home builder, up $1.94 in reaction to the company's plan to buy Forecast Group's California home building operations for about $225 million.

Lennar (LEN), another home builder, up $2.82 after rising $2.75 yesterday, when the company said its fourth quarter earnings will exceed the Wall Street estimate of $1.81 a share by at least 25 percent. Today a whole host, including brokerages First Boston, Raymond James Financial (ph), all upgraded the stock.

Mutual Risk (MM) the big casualty of the day, down $3.69. The company sees a fourth quarter loss of $0.15 to $0.20. Earlier, the Street was expecting earnings of $0.25.

And then Rhodia (RHA), this is the French chemicals company, down nearly $1. It confirmed it has broken off merger talks with a Dutch chemical maker, DSM.

Nasdaq trading, nearly a 22 point loss, a little over one percent. Volume moved up a bit from yesterday.

Microsoft (MSFT) topping the active list, up $0.22.

Intel (INTC) was down $0.76.

Then Cisco Systems (CSCO), a loss of $0.27. Not much movement here overall.

Oracle (ORCL) down $0.13.

Brocade Communications (BRCD) managed to gain $0.53.

Amgen (AMGN) down $0.06.

And then Broadcom (BRCM) a $3 loss, most likely in sympathy with TriQuint Semiconductor (TQNT), and we'll see that in just a moment.

Sun Microsystems (SUNW) lost $0.12.

Siebel Systems (SEBL) a loss of $1.14.

And then Applied Materials (AMAT) down $1.38 a share.

Preserver Group (PRES), this is an insurance company, up $2.45, another handsome percentage gain. The company plans to make a cash tender offer for all publicly held shares and the price, $7.75 per share.

SanDisk (SNDK) down $2.55. The company is privately placing $125 million in debt, but it'll be convertible into common stock at a price of $18.43 a share potential dilution.

And then TriQuint Semiconductor (TQNT) down $2.10. The chip maker said a downturn in its optical and satellite businesses will result in losses both in the current fourth quarter and also in the first quarter of next year.

The American Exchange Index (XAX) up a little over 5 points.

Cross Media Marketing (XMM) the best percentage gainer, up nearly $1 after the company said it's comfortable with its previous 2002 earnings estimate of $1.15 a share.

Hollywood Casino (HWD) edged up $0.65, good percentage move, though. Bear Stearns upgraded it from "attractive" to "buy." It traded as high as $10.25 during the day.

And finally, the only loser here, the NASDAQ Cubes (QQQ) down $0.75.

That's the Wall Street Wrap Up.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.