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Russian leader proposes a "breakthrough' budget

Russia's embattled prime minister scotched rumors that his Black Sea vacation might turn permanent with a splashy return to the Kremlin on Thursday featuring a super-strict fiscal plan for next year.

Prime Minister Viktor Chernomyrdin's 1995 budget proposal, seemingly designed to delight Western economists and draw billions in loans, called for such tough cutbacks on subsidies to agriculture, defense and failing factories that the government could get by without borrowing from the Central Bank.

"We need a decisive breakthrough," Chernomyrdin said at a special Cabinet meeting, according to the Itar-Tass news agency.

In the wake of the "Black Tuesday" collapse of the ruble last week and the widespread speculation about the prime minister's possible resignation, Chernomyrdin's very appearance in Moscow was something of a breakthrough.

Talk of his departure had grown so persistent that one Moscow radio station reported it as a fact, prompting indignant denials. Much was also made of Chernomyrdin's protocol-breaking absence during Queen Elizabeth's visit to Russia this week.

Arriving back in Moscow on Wednesday night, Chernomyrdin said he was not going anywhere. "Frankly speaking, I don't think many people will want to take my place now," he said.

On Thursday, the 56-year-old technocrat brandished the new $275-billion budget plan as justification for his days in sunny Sochi and called for painful belt-tightening to keep inflation under control. The budget has yet to be approved by lawmakers, but the Cabinet gave it a preliminary okay.

The budget has a new ideology, according to Economics Minister Alexander Shokhin. Instead of fueling inflation by printing money to pay its debts, the government will cover its expenses by collecting taxes more efficiently, issuing bonds and attracting international loans. The proposal limits the budget deficit to about 8 percent of the gross domestic product, and banks on some $8-billion from international lenders.

"That is the only way in today's situation for 1995 to become a year of stabilization," Shokhin told Itar-Tass. Until last week, Russian leaders were claiming that the economy was beginning to pull out of its long dive. Then the ruble suddenly dropped in one day by about 28 percent against the dollar. From a relatively modest 6 percent a month rate, inflation shot back up to more than 10 percent a month in the first two weeks of October.

Zhirinovsky likely to enter U.S.: Vladimir Zhirinovsky, whose extreme nationalist party did well in Russian elections last December, appears likely to receive a visa to enter the United States.

Administration officials concluded that only one provision of the law governing entry of aliens might be applicable to Zhirinovsky. It says applicants for visas can be rejected if the secretary of state concludes their entry or activities "would have potentially serious adverse foreign policy consequences."

Zhirinovsky has informed the U.S. government he would like to begin his visit Nov. 4.