THE WEEK

By BY KATHLEEN ADAMS, JANICE M. HOROWITZ, LINA LOFARO, BELINDA LUSCOMBE, MICHAEL QUINN, JEFFERY C. RUBIN, ALAIN L. SANDERS AND SIDNEY URQUHART

NATION

U.S.A.: CLOSED!

Call it a basic disagreement between the parties. Call it a constitutional crisis between the branches. But most of all, call it the formal and contentious opening of the 1996 presidential-election campaign. Key parts of the Federal Government shut down on Tuesday after President Clinton vetoed stopgap spending-and-borrowing legislation enacted by Congress. Clinton objected because Republicans had ladened the measures with restrictions intended to force him into accepting the huge spending cuts at the heart of their balanced-budget plan. The standoff continued throughout the week, overshadowing all but final congressional passage of the budget plan itself, which the President called "dead on arrival.''

THE PRACTICAL FALLOUT

The federal shutdown immediately sent home some 800,000 "nonessential" federal workers, bringing government agencies, museums, parks and laboratories to a halt. "Essential" workers--including national-security, safety and communications personnel--were ordered to stay on the job during the crisis. Treasury Secretary Robert Rubin juggled the federal books and tapped two civil service retirement funds in order to avert a potentially chaotic default on government obligations.

THE POLITICAL FALLOUT

Though voters voiced discontent with both parties, Republicans took the bigger drubbing in the polls--for now--as the architects of a needless impasse. Speaker Newt Gingrich did not help the party's image when he blurted out that he was taking a hard line partly because of what he perceived to have been President Clinton's lack of courtesy to him on the Air Force One flight to the funeral of Israeli Prime Minister Yitzhak Rabin.

CONGRESS: OPEN AND BUSY

The federal shutdown energized Republicans in the House and Senate to overcome most remaining differences and hone the final version of their seven-year balanced-budget plan. The two chambers also sent a $243 billion defense-appropriations bill to the White House for yet another anticipated veto--this time for spending more than Clinton desires.

FULFILLING EXPECTATIONS

Florida's presidential straw poll--the last and most closely watched of a series of informal ballots--selected no delegates to next summer's G.O.P. convention. But Bob Dole, who said he had to win to maintain momentum as the Republican frontrunner, did just that. Phil Gramm managed second, with Lamar Alexander close behind.

LOST AND FOUND

The six-day "Where's Joe Waldholtz?" saga ended Friday when the missing husband of Utah Representative Enid Greene Waldholtz turned himself in to federal authorities in Washington. Waldholtz, who mysteriously vanished from the city's National Airport, will be questioned about apparent personal and campaign financial irregularities. During his absence, Representative Waldholtz announced that she planned to divorce her husband (and close political aide), citing his "incredible level of deception."

NO MORE FREE LUNCH

Or free tickets or free vacations. Seeking to upgrade their greasy public image, House members voted overwhelmingly to impose a nearly complete ban on accepting gifts from lobbyists. (The Senate has already approved a similar but less stringent ban on its members.) Representative Waldholtz, one of the ban's biggest backers, skipped the debate.

MEDICAL PRIVACY

How private are medical records? Not very--to the point that medical information, easily stored in computer data banks, is being brazenly bought and sold by interested individuals and companies. Such were the disturbing revelations at a Senate hearing on a measure that would impose penalties on those who breach confidentiality, as well as give patients the right to see and correct their records. Critics maintain, however, that the bill is not strong enough; worse, they say, it might encourage the creation of more extensive medical data banks.

JUSTICES TO REVIEW SEX TV

The U.S. Supreme Court agreed to step into the politically hot debate over media smut. The Justices announced that they will decide whether a federal law that authorizes cable companies to censor indecent programs on leased and public-access channels violates free-speech guarantees.

O.J., THE SEQUEL

A state judge in the civil case against O.J. Simpson ruled that, contrary to his lawyers' wishes, Simpson's upcoming pretrial deposition will not be sealed. During the deposition, O.J. will be questioned under oath--for the first time--by lawyers for the families of murder victims Nicole Brown Simpson and Ronald Goldman.

WORLD

ISRAEL ENDS MOURNING

At a huge memorial gathering in Tel Aviv's main square, renamed for the slain Prime Minister, Yitzhak Rabin's widow Leah vowed that "the silent majority" who support the Arab-Israeli peace process "will no longer be silent." Meanwhile Israeli authorities arrested Arik Schwartz, a soldier on active duty, and Margalit Har-Sheffey, a 20-year-old female university student, for suspected complicity in the assassination.

SAUDI BLAST KILLS SIX

A bomb-laden van exploded in front of an American-run military-training center in the Saudi Arabian capital of Riyadh, killing six people, including five Americans, and wounding 60 more. Three separate groups claimed responsibility for the attack.

SERBS TO RETURN CROAT LAND

In a major concession that one diplomat called "the start of the end of the war in the ex-Yugoslavia," separatist Serbs in Croatia agreed to return a slice of oil-rich territory they had seized in 1991. The Eastern Slavonia region bordering Serbia will revert to Croatian control after a one-year transition period, which can be extended to two years by either party, with a U.N. administration during the transition.

ALGERIAN DECLARES VICTORY

Algeria's military-backed President Liamine Zeroual claimed victory over Islamic militants trying to overthrow his government after the country's Interior Ministry said Zeroual had won more than 61% of the votes cast in Algeria's first multiparty presidential elections. Turnout was reported at 75%, despite a boycott called by the militants, who vowed to "turn voting booths into coffins."

YELTSIN RE-EMERGES

Interviewed on Russian state TV, President Boris Yeltsin said, "I keep the wheel of the big ship Russia in my hands, and I keep my hand on Russia's pulse." Although his own pulse has been an international concern since he was hospitalized Oct. 26 with heart trouble, Yeltsin said reports that he needed surgery were "a lot of silly talk."

BUSINESS

TIME WARNER SHAKE-UP

After just six months on the job, Warner Music Group chief Michael Fuchs was ousted by Time Warner chairman Gerald Levin. Warner Bros. co-chairmen Robert Daly and Terry Semel will take control of the record company. And on the publishing side, both TIME and SPORTS ILLUSTRATED got new managing editors: Walter Isaacson for TIME and Bill Colson for SI. TIME managing editor Jim Gaines will become corporate editor.

DOWNSIZING AT AT&T

AT&T offered buyout packages to some 78,000 managers, about half the company's supervisory force. The restructuring, which could cut as many as 20,000 jobs, comes as the telecommunications giant is breaking up into three companies.

SCIENCE

LONG IN THE TOOTH

A 1.9 million-year-old jawbone fragment, teeth and primitive tools found in a cave in central China support the theory that the ancestors of modern humans began migrating out of Africa hundreds of thousands of years earlier than once thought. Scientists believe the remains may belong to a species called Homo habilis, a precursor of Homo erectus.

FAKE FAT ENDORSED

An FDA advisory panel said Olestra, a fat substitute that has taken Procter & Gamble 25 years to develop, is probably safe for consumption in goodies like snacks. Olestra has the cooking capabilities and taste of the real thing, but because its molecules are so large, it passes through the body without being digested. Critics say it depletes the body of nutrients and causes diarrhea.

--By Kathleen Adams, Janice M. Horowitz, Lina Lofaro, Belinda Luscombe, Michael Quinn, Jeffery C. Rubin, Alain L. Sanders and Sidney Urquhart