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A judge ordered American Taliban fighter John Walker Lindh held without bond in federal custody during a brief court appearance in Alexandria, Va. Lindh (above, on his way to court), his hair closely cut and beard shaved, said quietly "I understand" after the charges against him were read. He is charged with conspiracy to kill Americans in Afghanistan, with providing material support and resources to two foreign terrorist organizations, and with engaging in prohibited transactions with the Taliban. Preliminary and detention hearings were scheduled for Feb. 6.

To protect against future acts of terrorism, President Bush proposed a homeland security budget of $37.7 billion in fiscal 2003 - an increase of $18.2 billion over current levels. The budget would provide substantial increases for police departments, firefighters, and emergency medical teams; securing US borders, combating bio- terrorism, strengthening intelligence-sharing, improving transportation security, and supporting other national defense- related initiatives.

Federal Reserve Chairman Alan Greenspan said he sees encouraging indications that the US's first recession in a decade could soon be over. In testimony before the the Senate Budget Committee Thursday, he said: "There have been signs recently that some of the forces that have been restraining the economy over the past year are starting to diminish and that activity is beginning to firm." The Fed chief also defended his support last year of federal tax cuts, although the projected budget surplus has since dwindled from more than $5 trillion to $1.6 trillion over the next decade. (Related story, page 1.)

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On the eve of congressional hearings into the largest corporate failure in history, Enron chairman and chief executive officer Kenneth Lay resigned late Wednesday. Enron said its board was in the process of selecting a restructuring and turnaround specialist to serve as acting chief executive officer and to assist in its efforts to emerge from bankruptcy. In a related development, fired Arthur Andersen partner David Duncan, who had charge of auditing Enron, invoked his constitutional Fifth Amendment right against self-incrimination and refused to testify before a House committee unless granted immunity from prosecution. (Story, page 1; related editorial, page 10.)

Laura Bush became the fourth sitting first lady to testify before Congress when she addressed the Senate Education Committee. Her appearance originally was scheduled for Sept. 11, but she was instead rushed to a secret bunker in the uncertainty of the terrorist attacks. The former librarian and elementary-school teacher reported on last summer's White House summit on early childhood cognitive development. She also brought fresher news: education figures from the president's forthcoming budget.

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