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1985. It was a year in which Americans began dealing with tough internal problems: deficits, farm aid, tax reform, and espionage. On the space front, star-wars debate raged, shuttle operations became routine.

By CompiledCarol desLauriers Cieri / December 30, 1985

January Progress on arms control. Secretary of State George Shultz meets with Soviet Foreign Minister Andrei Gromyko Jan. 7-8 at Geneva. In the first significant negotiations in over a year, they agree to resume talks on nuclear arms control.

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Desks shifted at the White House. White House chief of staff James A. Baker and Treasury Secretary Donald T. Regan switch jobs Jan 8.

US opts out of World Court case. Reagan decides Jan. 18 the US will not join in further proceedings of Nicaragua's suit against it in the International Court of Justice.

President Reagan takes oath for his second term. Intense cold causes forces private ceremony Jan. 20 and cancellation of the Jan. 21 inaugural parade. The President and Vice-President George Bush take their public oaths in the Capitol Rotunda Jan. 21.

Time cleared in libel trial. Jan. 24, a federal jury finds that Time magazine did not publish a false, defamatory paragraph about former Israeli Defense Minister Ariel Sharon with ``serious doubts as to its truth.'' The Time story linked him with a massacre of Palestinians.

Charges brought in N.Y.C. subway shooting. Grand jury indicts Bernhard H. Goetz Jan. 25 with criminal possession of a weapon in the December 1984 shooting of four youths. FEBRUARY

Reagan gives State of the Union address. In Feb. 6 speech he calls for tax revision, economic growth, and a strategic defense system against nuclear weapons.

Cost of mailing first-class letter rises to 22 cents Feb. 17.

Gen. William C. Westmoreland drops libel suit against CBS. Action comes Feb. 18 after an 18-week trial in which he sought damages for a 1982 documentary accusing his command of a ``conspiracy'' to underestimate enemy strength in Vietnam.

Prime Minister Margaret Thatcher addresses Congress. The Feb. 20. address is the first by a British Prime Minister since Winston Churchill in 1952. Endorsing Reagan's policies, Mrs. Thatcher credits the West's military strength for bringing the Soviet Union to the bargaining table.

Reagan seeks to oust the Sandinistas. In a Feb. 21 news conference, Reagan says he wants to ``remove [the Sandinista government of Nicaragua] in the sense of its present structure in which it is a communist totalitarian state. . . .''

Sanctuary movement leader convicted. Jack Elder was found guilty Feb. 21 by a Houston federal jury of conspiracy and helping fleeing aliens to enter the US illegally.

Edwin Meese III is sworn in. His appointment as attorney general Feb. 25. comes after a year of controversy over his financial dealings.

Congress funds farm aid. The House and the Senate approve measures Feb. 27 to allot emergency loans to farmers for spring planting. MARCH

Ohio banks close. ESM Government Securities closes down March 4 in Florida, which leads to the March 15 closing of all Ohio state-chartered savings and loan associations. Forty-six institutions reopen March 23.

President vetoes farm aid. March 6. Reagan rejects emergency-credit bill passed by Congress as a ``massive new bailout'' that would add billions to the deficit.

US-Soviet arms talks open. Starting on March 12 in Geneva, positions are exchanged on nuclear and space weapons.

US won't negotiate with the PLO. Reagan rejects Egyptian President Hosni Mubarek's Mideast peace plan March 12 because it asks US to negotiate with Palestine Liberation Organization.

Secretary of Labor Raymond J. Donovan indicted. Mr. Donovan, who resigned March 15, is the first sitting Cabinet member ever to be indicted. Charged with fraud and larceny, he is replaced March 20 by US Trade Rep. William E. Brock III.

Spending limit on PACs violates First Amendment. Supreme Court rules March 18 that Congress's establishment of a $1,000 limit of spending by political-action committees violates the First Amendment.

Goetz indicted a second time. New evidence is presented to a second grand jury, which indicts Bernhard H. Goetz March 27 for attempted murder in the shooting of four youths in December 1984. APRIL

Indian government files suit in US against Union Carbide Corporation. The April 8 suit seeks compensation and punitive damages for the Dec. 3 gas leak from a Union Carbide subsidiary which killed over 2,000 people in Bhopal. MAY

US embargoes trade with Nicaragua. President Reagan declares economic sanctions against Nicaragua May 1 and bars Nicaraguan ships and planes from the US.