"They have got to follow a comprehensive plan with expense reductions, cuts in assets and some outside capital."

A. The restructuring and expense reductions have easily been as great as they were in the early 1990's.

Mr. Michael said he believed the rating agencies "were very interested in expense reductions" by the city.

Many major corporations have initiated expense reductions, including strict travel and room rate policies.

Earlier this year the projections were for $1 billion of expense reductions and a $1.5 billion increase in revenues.

A leading candidate for expense reduction, analysts say, is Hewlett-Packard's corporate computer unit.

"We're benefiting from the expense reductions," he said, "and now we're trying to put more focus on building volume."

Executive salary cuts, less overtime and expense reductions are included in the plan.

The basic assumption in the financial plan is that internal efficiency will do the lion's share of expense reductions.

And we will exceed our original expectations on expense reduction.