Budget cuts could hurt science but likely won't The 5.3% across-the-board budget cut ordered by President Bush on Oct. 16 could cost civilian research funding agencies millions of dollars in fiscal 1990. But hardly anybody expects that actually to happen. Bush also ordered a 4.3% cut for defense programs. His actions were dictated by Office of Management & Budget calculations that showed the fiscal 1990 deficit would exceed the mandatory Gramm-Rudman-Hollings deficit target of $100 billion by $16.1 billion, resulting from Congress' failure to enact a so-called reconciliation bill that met the deficit target. The first, and only other, sequester order, which was issued in 1986, provoked cries of anguish and led to real reductions in agency budgets. This order has had no such effect. Spokesmen for most federal departments and agencies say it's business as usual. For example, when asked what effect the sequester order would have on his agency, National Science Foundation budget division director Joseph L. Hull responded: "That's a good question." The reasoning behind this lack of response is perhaps best explained by an analyst for the Senate Budget Committee: "The general feeling here is that it [the sequester order] won't have much impact. Congress will wrap up the budget fairly soon and the sequester order will be rescinded." House and Senate conferees did begin their work on the reconciliation bill last Thursday. But there are fundamental differences between their two bills despite their common purpose of meeting the deficit target through a combination of spending cuts and new revenues. The House bill is a massive affair that covers issues ranging from a reduction in the capital gains tax to a new child care program. The Senate bill, which also started out looking like a Christmas tree, ended up being stripped to the bare essentials. So the conference may be lengthy and protracted. As an analyst for the House Budget Committee warns, the impact of
the sequester order depends very much on how long it remains in effect and whether it is rescinded by Congress. He points out that the 5.3% across-the-board cut could cost the National Aeronautics & Space Administration some $600 million, leaving it with a fiscal 1990 budget of $11.9 billion, just $900 million over fiscal 1989 and $1.4 billion less than it wanted. The sequester order, he estimates, could cost NSF about $100 million. And, he adds, although a 5.3% reduction doesn't sound like much, it means that a lot of new programs that agencies were planning won't get funded because ongoing programs will have priority. Still the general feeling is that Congress will include a repeal of the sequester order in the final version of the reconciliation bill. If it doesn't, the order will remain even for agencies whose fiscal 1990 appropriation bills weren't enacted until after the order went into effect. Janice Long
Huntsman group offers to buy Aristech Jon M. Huntsman, heading an investment group, has offered to purchase Aristech Chemical for $25 per s h a r e , or about $817.5 million. Huntsman is chairman of Huntsman Chemical, Salt Lake City. Earlier this year, Huntsman acquired about 8% of Aristech's 32.5 million outstanding shares of common stock. At that time, filings with the Securities & Exchange Commission indicated that Huntsman was interested in Aristech's polypropylene business. Aristech has a 380 million lb-per-year polypropylene plant at La Porte, Tex., and a 260 million plus lb-per-year plant at Neal, W.Va. The latest development could be designed to increase the pressure on Aristech to sell these plants. Huntsman Chemical has a polypropylene plant, with a capacity estimated at about 325 million lb per year, at Woodbury, N.J., but it is being expanded. Aristech has opposed sale of its polypropylene business to Huntsman Chemical. The latest offer purports to be "friendly," but Aristech says only
that the proposal has been received and was discussed at last week's board of directors meeting. Aristech chairman and chief executive officer Thomas Marshall says the board has not had sufficient time for appropriate review. It's questionable just how successful Huntsman could be in its takeover bid, should the offer turn unfriendly. Aristech, after the earlier Huntsman filing, instituted a number of antitakeover defenses. And Delaware, where the Pittsburghbased firm is incorporated, has regulations that might make it difficult for Huntsman. Partly because of these potential problems, and also because the first trading day after the announcement was Friday, Oct. 13—the day the stock market took a tailspin—the share price for Aristech did not reach the offer price. The stock rose 15% to just $20 per share. Since then, the stock has moved up slightly to $21 y4 per share. Aristech last week also reported that third-quarter earnings fell 47% from last year's third quarter to $21.9 million, on a 17% decline in sales to $230 million. The company also announced that it is suspending plans to build a new cumene/phenol complex in Louisiana. William Storck
Bush's chemical arms shift draws fire President Bush's decision to retain the option of producing chemical weapons even after the U.S. signs a global chemical weapons disarmament treaty is disturbing members of Congress and is proving embarrassing to his Administration. But despite their chagrin, U.S. officials are moving ahead with plans to exchange data with the U.S.S.R. According to one U.S. official, in December the U.S.S.R. will give the U.S. a list of its stockpile sites and production facilities. The U.S. in turn will reveal its stockpile size. Next year, the two countries will visit each other's chemical weapons production facilities and storage sites. The Soviets are scheduled to visit two U.S. commercial facilities. October 23, 1989 C&EN
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