YEAR IN REVIEW 1997: NOBEL-PRIZES

Prize for Chemistry The 1996 Nobel Prize for Chemistry was awarded to a group of British and U.S. researchers who discovered fullerenes, a previously unrecognized form of carbon, the discovery of which opened a new branch of chemistry. Fullerenes are hollow, spherical clusters of carbon atoms bonded together into highly symmetrical, cagelike structures. Bonds in the prototype molecule, C60, resemble the seams on a soccer ball. Geometrically, C60 is a polygon with 60 vertices and 32 faces, 12 of which are pentagons and 20 of which are hexagons. In the 1985 paper describing their work, the discoverers chose a whimsical name for C60. They called it buckminsterfullerene after R. Buckminster Fuller, the U.S. architect whose geodesic dome design, the best-known example of which was the U.S. pavilion for Expo 67 in Montreal in 1967, had a similar structure. Chemists began calling C60 molecules buckyballs. The name and the elegant netlike structure of fullerenes galvanized public fancy in a way that few other basic advances in chemistry had. For chemists the proposed structure was uniquely beautiful and satisfying, the Royal Swedish Academy of Sciences said in its citation. It corresponds to an aromatic, three-dimensional system in which single and double bonds alternated, and was thus of great theoretical significance. The prize, worth $1,120,000, was shared by Richard E. Smalley and Robert F. Curl, Jr., of Rice University, Houston, Texas, and Sir Harold W. Kroto of the University of Sussex, Brighton, Eng. Kroto, Curl, and Smalley did their landmark experiment over a period of 11 days in 1985. The Swedish Academy noted the assistance of their graduate students James R. Heath and Sean C. O'Brien, who did not share in the award. At the time of the discovery, Kroto was using microwave spectroscopy techniques to analyze gas in carbon-rich giant stars and clouds of gas in interstellar space. He had discovered long, chain-like molecules of carbon and nitrogen in stellar atmospheres and in gas clouds. Kroto wanted to study the vaporization of carbon to find out how these carbon chains form, but he lacked the apparatus to vaporize carbon. He mentioned the problem to a friend, Curl, who worked with Smalley. Curl told Kroto that Smalley had designed and built an instrument that seemed perfect for Kroto's research. Smalley was an authority on cluster chemistry, the study of aggregates of atoms or molecules that range in size between the microscopic and the visible. Specifically, Smalley was interested in clusters of metal atoms of potential use in electronic semiconductor materials. His laboratory instrument, a laser-supersonic cluster beam apparatus, could vaporize almost any known material into a plasma of atoms and then be used to study the resulting clusters. Kroto thus traveled to Rice University to work with Smalley and Curl on carbon vaporization and long-chained carbon molecules. The spectra from the first experiments did, indeed, have peaks that indicated the presence of those molecules. The spectra, however, also had peaks corresponding to a seventh, previously unrecognized form of carbon. Peaks on the spectra suggested molecules containing even numbers of carbon atoms--from 40 to more than 100. Under certain laser-vaporization conditions, most of the new carbon molecules had a structure of C60. Kroto arrived at Rice on Sept. 1, 1985, and dispatched a research paper announcing the discovery of the structure of C60 on September 12; the report was published on November 14. Kroto was born on Oct. 7, 1939, in Wisbech, Cambridgeshire, Eng., and received a Ph.D. from the University of Sheffield, Eng., in 1964. He joined the faculty at Sussex in 1967 and was named Royal Society research professor in 1991. Smalley was born on June 6, 1943, in Akron, Ohio, and worked as a research chemist with Shell Chemical Co. before receiving a Ph.D. from Princeton University in 1973. He joined the Rice faculty in 1976. Curl was born on Aug. 23, 1933, in Alice, Texas, and received a Ph.D. from the University of California, Berkeley, in 1957. He joined Rice University in 1958. (MICHAEL WOODS) Prize for Economics The awarding of a Nobel Prize comes with more than just a hefty sum of money ($1,120,000 accompanied each prize in 1996). There is also immediate international fame and sudden widespread recognition for research that previously may have gone unnoticed outside the narrow confines of academia. The recipients, who are generally notified of the award by an early-morning phone call, may awaken to media pressures to which they are unaccustomed. Such was the case with William S. Vickrey, the Canadian-born economist at Columbia University, New York City, who shared the 1996 Nobel Memorial Prize in Economic Science with Scottish-born James Alexander Mirrlees of the University of Cambridge. Vickrey, perhaps straining under a flurry of unprecedented activity and scrutiny, died three days after receiving the honour, apparently of a heart attack. Upon selection, the two economists, who did not work together, were lauded for their analytic research on economic incentives in situations with incomplete, or asymmetrical, information. The area of microeconomics on which the pair worked is related to game theory, a branch of mathematics that examines how the players of a game affect its outcome by revealing or shielding information from one another. Vickrey and Mirrlees helped elucidate situations in which incomplete information poses unforeseen problems. For example, a government that hopes to institute a progressive income tax system that is both efficient and equitable must consider the possibility that stepped income brackets with increasing tax penalties may affect a worker's incentive to earn greater wages and, consequently, distort productivity. This optimal income tax problem parallels the moral hazard problem, which is exemplified by an insurance policy that offers such sizable coverage that a policyholder may take greater than usual risks. Classical economic models, which assume that all parties have access to the same information, tend not to incorporate incentives and similar variables into their equations. Vickrey was born June 21, 1914, in Victoria, B.C., and was educated at Yale University (B.S., 1935) and Columbia University (M.A., 1937; Ph.D., 1947), where he taught throughout his career. Because of his interest in human welfare, he often chose projects that had practical applications. His studies of traffic congestion concluded that pricing on commuter trains and toll roads should vary according to usage, with higher fares and tolls during peak-use periods. This time-of-day cost structure was later widely adopted by electric and telephone utilities. Although proposals of this kind gained him the audience of city planners worldwide, few of his ideas were adopted at the time. In his influential article Counterspeculation, Auctions, and Competitive Sealed Tenders (1961), he proposed what came to be known as the Vickrey auction, which, through sealed bidding, awards the auctioned item to the holder of the highest bid but at the sum bid by the second highest bidder. According to Vickrey, in guaranteeing the lower price, both buyers and sellers would benefit, because bidders would be more likely to bid what they believed the item to be worth, as opposed to submitting a lowball bid and risking losing the item for a sum less than the item's perceived value. Born July 5, 1936, in Minnigaff, Scot., Mirrlees studied mathematics at the University of Edinburgh (M.A., 1957) and Trinity College, Cambridge (Ph.D., 1963). He taught at the University of Oxford (1969-95) and at Cambridge. His technically refined mathematical skills complemented Vickrey's theoretical creativity, and his groundbreaking models and equations, published in the 1970s, illustrated the optimal income taxation and moral hazard problems often treated in Vickrey's books. Mirrlees's methodology became the standard in the economics of informational asymmetries and was used by a generation of later economists in a variety of applications. (TOM MICHAEL) Prize for Literature Polish poet Wislawa Szymborska was little known outside her country before being chosen to receive the 1996 Nobel Prize for Literature. The reclusive poet, who had published only seven volumes of verse in Poland during the past three decades, was considered difficult to translate owing to the subtlety of her technique. Collections of her poetry did appear, however, in several languages; her English-language titles were Sounds, Feelings, Thoughts (1981), People on a Bridge (1990), and View with a Grain of Sand (1995). Observers such as Polish poet Czeslaw Mil osz, winner of the 1980 Nobel Prize for Literature, regarded the selection of Szymborska as international confirmation of the brilliance of Polish poetry in the period following World War II. Szymborska, along with fellow poets Zbigniew Herbert and Tadeusz Rzewicz, held common witness to the struggles of modern Poland--World War II, the Holocaust, Soviet occupation, postwar Stalinism, martial law, and transition to democracy. She tempered this, however, with a strong humanism and a desire to deal with sophisticated philosophical issues. Szymborska diverged from her compatriots in her universal approach to personal issues; daily occurrences were regularly reexamined in broad perspective in her verse. Her delicate style was classical in its wit, depth, and detachment yet decidedly modern with its irony and nonchalance. Her language was unpretentious, reflecting the stripped-down, straightforwardness of social realism, which held sway in Eastern European poetry in the mid-1950s. Her tone was often wry and conversational. Her plainspoken language, however, belied a complexity of thought, in both structure and content. These hidden depths were exemplified in the poem The Three Oddest Words (1996): When I pronounce the word Future, the first syllable already belongs to the past. When I pronounce the word Silence, I destroy it. When I pronounce the word Nothing, I make something no nonbeing can hold. Szymborska was born on July 2, 1923, in the town of Bnin (now part of Kornik) in western Poland, near Poznan. From 1931 she lived in Krakow, where in 1945-48, at Jagiellonian University, she studied literature and sociology. Her verse was first published in 1945, and her first two books of poetry, which she had since disclaimed for their slavish devotion to social realism, appeared in 1952 and 1954. Her first collection published after the Soviet loosening of censorship, Wolanie do Yeti (1957; Calling Out to Yeti), commented on Stalinism through the title character, Yeti, or the Abominable Snowman. Later volumes included Sl (1962; Salt) and Sto pociech (1967; No End of Fun). The title work of Wszelki Wypadek (1972; Could Have) examined chance, one of her common themes. Later books included Wielka liczba (1977; A Large Number), Ludzie na mscie (1986; The People on the Bridge), and Koniec i poczatek (1993; The End and the Beginning). From 1953 to 1981 Szymborska worked for the weekly Zycie literackie (Literary Life), contributing a column entitled Lektury nadobowiazkowe (Noncompulsory Reading); these columns were collected into bound editions in 1973, 1981, and 1992. In the 1980s she contributed to the periodicals Arka and Kultura--the latter was an expatriate journal published in Paris. Symborska was also a noted translator, with a particular expertise in French poetry of the 16th and 17th centuries. (TOM MICHAEL) Prize for Peace Not inclined to shy away from international conflicts, the Norwegian Nobel Committee gave worldwide publicity to the dissident movement in East Timor by awarding the 1996 Nobel Prize for Peace to two East Timorese activists, Bishop Carlos Filipe Ximenes Belo and Jos Ramos-Horta. East Timor, which occupies the eastern half of the island of Timor, was a somewhat neglected colony of Portugal for most of the 20th century. An independence movement in the mid-1970s prompted Portugal to withdraw from the island in November 1975 when the leading warring faction, the leftist group Fretilin, declared independence for East Timor. This freedom, however, did not last long. Neighbouring Indonesia, with the tacit approval of Western nations concerned about the spread of communism, invaded East Timor in early December and incorporated it as a province the following year. The Indonesian government used military might to impose its will on a noncompliant population. Human rights organizations estimated that one-third of the 600,000 inhabitants lost their lives in the years that followed Indonesia's control of the territory. Although Indonesia called East Timor its 27th province, it was not recognized as such by the United Nations or any nation except Australia. In naming the award recipients, the Nobel Committee did not mince words when it described Indonesia's 20-year rule as systematic oppression. Indonesia expressed regret over the committee's choices, particularly that of the exiled activist Jos Ramos-Horta, a longtime proponent of independence. The 46-year-old former guerrilla was first exiled from East Timor in 1970 by the Portuguese but returned in 1972 to participate in the civil war with the Fretilin faction before leaving in 1975, only days before Indonesian troops took control. He remained in exile in Australia. Later renouncing his connections to guerrilla forces, Ramos-Horta sought international support for an ambitious peace plan for the region; he also served on the faculty of the University of New South Wales, Sydney. Belo, a 48-year-old native Timorese, was ordained a Roman Catholic bishop in 1983. As a patriot and spiritual leader of a territory that was more than 90% Catholic, he was the foremost critic of the brutal tactics of Indonesian President Suharto, who ruled a country that was 90% Muslim. Belo's high profile and outspoken nature made him a target for at least two attempts on his life, one in 1989 and the other in 1991. His protests were most notable following the massacre of about 200 demonstrators at a cemetery in Dili, the capital, in November 1991. He personally ushered many of the wounded to safety. In an open letter written in July 1994, he outlined his concern for the East Timorese people and proposed that the Indonesian government reduce its troops, curtail repressive measures, extend freedoms to the Catholic Church, permit free speech, enter dialogue with international groups, and allow East Timor to hold a democratic referendum on self-determination or, barring that, to create legislation granting East Timor special territorial status and greater autonomy. In his speech accepting the prize in December, Belo urged a nonviolent resolution of the problem, citing the example of 1964 Nobel laureate Martin Luther King, Jr. (TOM MICHAEL) Prize for Physics Three U.S. scientists shared the 1996 Nobel Prize for Physics for their 1972 discovery of superfluid helium-3 (3He), one of nature's most bizarre liquids. A superfluid lacks the internal friction that exists in normal liquid and thus flows without resistance. Superfluid 3He, for example, can ooze through cracks and pores that normal liquids cannot penetrate, climb the walls of containers and pour out, and even flow uphill. Douglas Osheroff, David Lee, and Robert Richardson, however, did not receive the prize, which totaled $1,120,000, because 3He can perform magical tricks. Rather, superfluid 3He allowed scientists to study directly in easily visible systems the strange quantum mechanical effects that previously could be studied only indirectly in invisible molecules, atoms, and subatomic particles. The study of this exotic quantum liquid has led to concepts that are of general importance, the Royal Swedish Academy of Sciences said in its citation. The research, for instance, helped scientists understand how the first structures began to form in space microseconds after the big bang, the primordial explosion that formed the universe. Superfluid 3He is anisotropic: it displays different properties in different directions along which the property is measured. The physical transitions from one form of superfluid 3He to another have been used as a model for the cosmological phase transitions thought to have occurred a split second after the big bang, the Swedish Academy said. Experts believed that in the early universe, such transitions may have formed strange, linelike defects termed cosmic strings. These strings, in turn, may have formed the first physical structures in the universe. Cosmic strings have special properties that make them ideal candidates for giving rise to structures that evolved into the first stars and galaxies. For instance, cosmic strings cannot have ends and must form closed loops. They are trillions of times thinner than an atom and yet so immensely dense that a cosmic string one meter long would weigh 1020 kg. Superfluid 3He also may help in understanding and developing high-temperature superconductors, the academy added. These ceramic materials, discovered in 1986, lose resistance to the flow of electricity at higher temperatures than did previous superconductors. Like 3He, they also have different properties in different directions. The superfluid thus might be used to model their behaviour and develop general theories about how to make materials that become superconducting closer to room temperature. In 1966, Lee and Richardson were professors at Cornell University, Ithaca, N.Y. Osheroff was a professor at Stanford University. At the time of the discovery of superfluid 3He, Richardson and Lee were senior researchers at Cornell, and Osheroff was a graduate student on their research team. Richardson, Lee, and Osheroff discovered superfluidity in 3He by a fortunate accident. The group was not looking for superfluidity but was instead studying other aspects of superfluid 3He. They were experts in low-temperature physics and had built their own cooling apparatus at Cornell. But in their initial measurements of cooled 3He, a problem occurred with their thermometer as temperatures dropped below a few thousandths of a degree of absolute zero (-273 C). Therefore, they decided to monitor the internal pressure of the 3He sample while applying external pressure that varied with time. It was the research student Osheroff who observed a change in the way the internal pressure varied with time, the Nobel citation pointed out. Even the most experienced senior researchers are tempted to dismiss such small deviations as more or less inexplicable peculiarities of the equipment, the citation explained. He did not put the observation aside as being due to some feature of the apparatus, but instead insisted that it was a real effect. Lee was born on Jan. 20, 1931, in Rye, N.Y., and received a Ph.D. from Yale University in 1959. Osheroff was born on Aug. 1, 1945, in Aberdeen, Wash., and received a Ph.D. in 1973 from Cornell University. Richardson was born on June 26, 1937, in Washington, D.C., and received a Ph.D. in 1966 from Duke University, Durham, N.C. (MICHAEL WOODS) Prize for Physiology or Medicine Australia's Peter Doherty and Switzerland's Rolf Zinkernagel shared the 1996 Nobel Prize for Physiology or Medicine for their simple explanation of how the immune system distinguishes virus-infected cells from normal cells. In this key step in battling viral infections, specialized white blood cells termed cytotoxic T cells, or killer T cells, somehow recognize virus-infected cells and then eliminate them, but these T cells leave normal body cells unharmed. Their discovery established a foundation for understanding how the immune system makes critical decisions about whether a cell is self or nonself. A normally functioning immune system does not harm self cells that are part of the body. Yet it can recognize, and target for death, infected cells, invading microorganisms, and other foreign materials or antigens. The work fundamentally changed our understanding of the development of the immune response, said the Nobel Assembly at the Karolinska Institute in Stockholm, which awards the medicine prize. Apart from vaccines, the work has guided attempts to use the immune system to hunt down and destroy microscopic cancer cells that have escaped from tumours. It has also helped scientists as they design ways to suppress harmful immune system attacks on the body's own tissue, as seen in multiple sclerosis and diabetes. Doherty and Zinkernagel did their landmark research on laboratory mice between 1973 and 1975 while at the John Curtin School of Medical Research in Canberra, Australia. Doherty in 1996 was chairman of the department of immunology at St. Jude Children's Research Hospital in Memphis, Tenn. He was born on Oct. 15, 1940, in Australia and received a veterinary medicine degree in 1966 from the University of Queensland, Australia, and a Ph.D. in 1970 from the University of Edinburgh. Zinkernagel was in 1996 head of the Institute of Experimental Immunology at the University of Zrich, Switz. He was born on Jan. 6, 1944, in Switzerland, received an M.D. in 1970 from the University of Basel, Switz., and a Ph.D. in 1975 from Australian National University, Canberra. When Doherty and Zinkernagel began their research, they wanted to identify causes of the fatal destruction of brain cells in mice infected with lymphocytic choriomeningitis virus (LCMV). In the experiments they developed an assay to test their theory that killer T cells caused the damage while attacking virus-infected cells. They mixed T cells from sick mice with mouse cells infected with LCMV and found that the T cells did, indeed, destroy the infected cells. By lucky accident, all the mice were members of the same inbred strain. They thus were as genetically alike as identical twins and had identical major histocompatibility complex (MHC) antigens. There was an unexpected discovery when Doherty and Zinkernagel mixed the T cells with virus-infected cells from another strain of mice. Doherty and Zinkernagel expected that the T cells, primed for attack, would strike the instant they came into contact with LCMV-infected cells. Instead, they acted as if they did not see the virus. Recognition, Doherty and Zinkernagel suspected, required the presence of some other protein on the surface of an infected cell. Further research showed that T cells must recognize two separate signals on an infected cell. One is the signal of a foreign invader, the virus inside the infected cell. The other is the self signal from the cell's MHC antigens. In Doherty and Zinkernagel's experiments, the T cells were looking not just for virus-infected cells but also for cells with the MHC antigens characteristic of the original strain of mice. The T cells could not recognize MHC antigens from the new strain, and no immune response occurred. This concept of simultaneous recognition of both self and foreign molecules formed the basis for a new understanding of cellular immunity, the Nobel Assembly said. Researchers then began using cytotoxic T cells to kill viruses in bone marrow prior to bone marrow transplants. They also began developing vaccines, including those for certain forms of cancer and AIDS, that produce cytotoxic T cells. (MICHAEL WOODS) Social Protection North America. The United States entered a new era in social policy in 1996 by enacting historic legislation that changed the philosophy as well as the structure of protection for the needy. After 61 years under a welfare system in which the federal government had guaranteed cash assistance to the poor for an indefinite period, welfare policy was revised to put new emphasis and reliance on the states while stressing individual self-sufficiency and the initiation or resumption of work among beneficiaries. The Personal Responsibility and Work Opportunity Reconciliation Act, the official name of welfare reform, was passed by Congress in August. Pres. Bill Clinton, who twice before had vetoed Republican-sponsored reform bills, signed the measure despite deep divisions within his administration. The president called the act "far from perfect" but pointed out that it ended "welfare as we know it." The new law, which took effect on Oct. 1, 1996, gave states broad authority over the core federal cash-assistance program--Aid to Families with Dependent Children (AFDC)--and also over food stamps and Supplemental Security Income (SSI) for the elderly and disadvantaged poor. The federal government would end entitlement programs that guaranteed welfare checks to all eligible low-income mothers and children, a practice that was established during the New Deal presidency of Franklin D. Roosevelt. Instead, Washington would send states predetermined lump sums or block grants, based mainly on each state's welfare expenditures between 1992 and 1994. While states would assume near-total control over establishing rules for eligibility and benefits, they were instructed to work within the new federal guidelines that required able-bodied welfare recipients to find work within two years after the state program took effect in order to prevent a loss of benefits and that limited recipients to five years of benefits over their lifetime. About one-half of all AFDC recipients received benefits for five years or longer. States could, however, exempt up to 20% of their caseloads from the five-year time limit for reasons of hardship. The law also created a comprehensive child-support system, required unmarried teenage parents on welfare to live at home and stay in school, and provided an additional $4 billion in child-care funds for welfare parents who were required to work. Other provisions of the bill stipulated that: Cash aid and food stamps would be denied to anyone convicted of felony drug charges, although that person's family could still receive benefits. Adults between the ages of 18 and 50 who did not have children would be limited to receiving three months of food stamps over three years unless they were working. If they were laid off, they would be eligible for an additional three-month supply. Food stamps, SSI, and a variety of other low-income federal social services would be denied to legal immigrants who were not citizens. Single mothers on welfare who refused to cooperate in identifying the fathers of their children could lose at least one-fourth of their benefits. Improvements would be made in tracking and prosecuting parents who did not pay court-ordered child support. The new approach would save an estimated $55 billion over the next six years, mostly by reducing food-stamp payments and cutting benefits to legal immigrants. Advocates for the poor, who maintained that the changes would dramatically hurt states, localities, and the poor, were planning to mount legal challenges to state programs. The Urban Institute estimated that nearly 4.9 million children would be dropped from welfare rolls under the law by the year 2005 and 1.1 million would be pushed into poverty. At the end of 1995, 12.8 million persons received AFDC benefits, two-thirds of them children. The number was down 1.3 million, or 9%, from the total in January 1993; 42 states showed declines in welfare rolls over that period. Food stamps were issued to 26 million persons, while SSI was given to 6.5 million others. One-half of the children on the welfare rolls were born out of wedlock, including 20% born to mothers under 21. Of the recipients, 38% were white, 37% African-American, 19% Hispanic, and 5% noncitizens. The federal share of AFDC benefits in 1995 was $22 billion. States had until July 1, 1997, to submit their plans for administering welfare. More than 40 states had been experimenting with welfare ideas under waivers granted by the federal government. Some of the state programs rejected entitlements in favour of work and job training; others required teenage mothers on welfare to live at home and stay in school or reduced assistance for mothers who had additional out-of-wedlock births while on welfare. Most of these experiments would continue regardless of the new federal law. While most legal immigrants would lose food stamps and a variety of other federal assistance under the welfare bill, regulations that would have limited their access to public schools and federally funded HIV and AIDS treatment were dropped from an immigration bill passed in 1996. Instead, that measure concentrated on increasing the Border Patrol and other enforcement efforts to prevent illegal immigrants from entering the U.S. Also abandoned in the face of strong Democratic opposition and a veto threat by Clinton was a Republican-backed overhaul of Medicaid, the federal-state health insurance program for the poor. That legislation would have put Medicaid on the same path as welfare by ending the federal guarantee of coverage and turning control of Medicaid over to the states. The welfare-reform legislation did, however, make some changes in Medicaid. States were permitted to deny Medicaid to adults who were dropped from welfare rolls because they did not meet work requirements, and states could decide whether to deny Medicaid coverage to legal immigrants. In another area of health care, Congress passed the Health Insurance Portability and Accountability Act. Described as the most significant expansion of health care access in more than 30 years, the law guaranteed continued health insurance coverage for 25 million workers if they lost or left their jobs. Previously, workers lost coverage if they left their jobs. After a lengthy debate Congress also passed the first minimum-wage-increase legislation since 1989. The minimum rose from $4.25 to $4.75 on Oct. 1, 1996, and was scheduled to increase an additional 40 cents on Sept. 1, 1997. The hike came as the inflation-adjusted value of the minimum wage approached a 40-year low. Supporters complained that the increase was only a partial step in making up lost ground, while opponents contended that the raise would destroy thousands of low-wage jobs and thus hurt the people it was intending to help. About 10 million workers, 5.3% of the total workforce, received the minimum wage, down from an all-time high of over 15% in the early 1980s. Of the 10 million, 46% were over 25 years old, and most of the rest were single and under 25. Persons on Social Security also would receive more money. Congress voted to increase the earnings limit--the amount that beneficiaries aged 65-69 who held jobs could earn without losing any of their benefits. Earnings had been capped at $11,520 (indexed for inflation); for every $3 earned above that, a recipient lost $1 of benefits. Under the changes the threshold would increase gradually to $30,000 over seven years. This would affect about 800,000 beneficiaries, according to the Social Security administration, and cost an estimated $5.6 billion over seven years. The 44 million retirees who received Social Security would receive a 2.9% cost-of-living raise, effective January 1997, the largest since 1992. The increase would boost the average retirement check from $724 to $745 a month. The maximum earnings from which Social Security tax was deducted would rise from $62,700 to $65,400 in 1997. The tax was 12.4%, split equally between employees and employers. An additional 2.9% Medicare tax, also split evenly, was levied on all wages. The Census Bureau reported in September that in 1995, for the first time in six years, household income had risen and that the number of Americans living below the poverty line had fallen for the second year in a row. The median household income increased to $34,076, up 2.7% from 1994 after adjusting for inflation. The number of people living in poverty declined to 36.4 million, or 13.8% of the population--down from 38 million and 14.5% in 1994. The poverty rate for African-Americans (30.3%) was the lowest since the Census Bureau began collecting data in 1966. The number of children living in poverty fell from 15.3 million to 14.7 million, but they remained the age group most likely to be poor. Two factors were generally credited for the rise in incomes--more household members working more hours and increases in other kinds of income such as Social Security, pensions, interest, and dividends. In Canada the province of British Columbia reinstated a controversial residency requirement for welfare recipients, and Ontario boasted about reducing its welfare rolls to 1.2 million after implementing (October 1995) a 21.6% cut in social-assistance benefits for all but the elderly and permanently disabled. As a result, community workers and food banks reported dire conditions for those who received cuts in aid and could no longer afford food or shelter. Western Europe. Measures especially targeted at health care were taken to improve the financial stability of various social security programs. A number of governments introduced austerity programs, elements of which were met with open hostility. In the United Kingdom the government launched a major campaign aimed at preventing social security fraud as a means of ensuring the viability of the welfare program. France embarked on major health care reform and introduced new regulations for social security financing to deal with a deficit that was judged unacceptable. To control health expenditures, the reform limited patients' freedom to bypass general practitioners and consult directly with specialists or receive diagnostic tests. Patients received a health-record booklet that was to be presented upon treatment. Pressure was put on doctors to cut back both on the amounts of medications that they prescribed and on the use of the more expensive types. The hospitalization system was also revised to strengthen coordination between public- and private-sector facilities. Several short-term emergency financial measures were taken to reduce the deficit, including the introduction of a special tax levied on employer contributions for coordinating benefits and the creation of a special body to manage the refinancing of the social security debt. The German government introduced reform legislation in its "Program for Increased Growth and Employment," which was heatedly debated throughout the country in the fall of 1996. Two proposals were particularly controversial. Sick-leave pay would be reduced from 100% to 80% of regular wages during the first six weeks of a worker's absence, and after six weeks the benefit paid would be reduced by 10%. Protests by workers caused many German employers to continue to pay 100%. The second measure dealt with a sooner-than-expected increase in the retirement age needed for both men and women to be eligible for social security. Both would be required to work until age 65, men starting in 2002 instead of 2007 and women beginning in 2005 rather than 2017. Austria's main political parties agreed on an austerity package to raise taxes, cut spending on civil services, and lower welfare benefits for students, the unemployed, and people in need of permanent care. To deal with increasing health-insurance deficits, reductions in sick-leave pay were discussed. The Netherlands privatized most benefits regarding sickness, making employers responsible for continued wage payments, including 70% of a sick worker's wages, which would be payable for a period of up to 52 weeks. The Netherlands also replaced their survivors' benefits program with a new scheme that required tighter eligibility rules and an income threshold. Various proposals were made throughout the year to improve the financial equilibrium of the public old-age pension program, including substantially higher contributions and contributions based on occupation. In Sweden changes in social security health insurance were proposed for January 1997. Among other measures, the government proposed to limit the amount of sick-leave pay that employers could recover from the government. In Finland agreement was reached in April on reforming unemployment benefits. The government estimated that reform was necessary to eliminate those structures of the unemployment system that undermined the will to work. Savings were to be achieved by eliminating automatic cost-of-living increases in 1997-99 and by altering the qualifying conditions for the receipt of benefits. In January the mandatory employers' earnings-related pension plan underwent changes that encouraged employees to remain working until age 65. Social security was also a major topic in Swiss public debate throughout 1996. Strong controversy arose in relation to old-age pensions. There was debate over whether the country should move from a system of universal social insurance to means testing and private provision.