THE WEEK: JUNE 25 - JULY 1

NATION

OUT WITH A BANG

Ending its term with the usual flurry of opinions, the U.S. Supreme Court announced some of its most important decisions of the year. The most immediately controversial: a ruling in a Georgia case that declared racial gerrymandering unconstitutional under the 1965 Voting Rights Act-a decision that is certain to alter the country's political landscape. By a 5-to-4 vote the Justices ruled that legislative districts drawn with race as the "predominant" motivating factor should generally be struck down. Black officials, many of whom owe their first-time election to racially conscious redistricting, were stunned and outraged. President Clinton called the ruling a "setback."

THE OTHER DECISIONS

By a 5-to-4 vote, the court also decided that the University of Virginia violated free-speech guarantees when it refused to subsidize a student-run Christian magazine while subsidizing other student groups. And in a Fourth Amendment case, the court upheld by 6 to 3 a local school plan in Oregon that requires all student athletes to submit to random drug testing.

G.O.P. BUDGET PLAN PASSES

On party-line votes, both the House and Senate adopted the Republican seven-year balanced-budget plan that would slash spending by nearly $1 trillion and taxes by $245 billion. President Clinton warned that he would wield his veto power in the months ahead to refashion the spending and tax bills that will be required to implement the plan, which only sets budgetary outlines. In other budget matters, a $16.4 billion package of cuts in the current year's budget-originally vetoed by the President but since modified by Republicans to obtain his support-was stalled just before the July 4 recess by two Senate Democrats who said the cuts were still too drastic.

PACKWOOD GETS A BREAK

Amid a series of closed-door meetings with the Senate Ethics Committee, which is investigating allegations of impropriety against him that include sexual misconduct, Finance Committee chairman Bob Packwood got a rare bit of good news. The Justice Department said it would not prosecute him on a set of charges that accused him of having arranged for lobbyists to make job offers to his wife in exchange for official favors.

HUBBELL SENTENCED

Former Associate Attorney General Webster Hubbell, one of President Clinton's closest friends and the highest-ranking official to have been toppled by the Whitewater investigation, was sentenced to 21 months in prison. He had pleaded guilty last December to mail-fraud and tax-evasion charges for having bilked his former law firm and clients by submitting inflated expenses and fees.

SOME PRANK

Air travel and mail deliveries throughout California were disrupted when the nation's most notorious and elusive mail bomber, known as the Unabomber, threatened in a letter he sent the San Francisco Chronicle to blow up an unspecified airliner at Los Angeles International Airport. Officials maintained tight airline and postal security despite a second letter from the Unabomber to the New York Times boasting that the threat was a hoax -- in his words, "one last prank." In yet a third communication at week's end, the bomber said he would desist from further killing attempts if the Times or Washington Post agreed to publish his anti-industrial, antitechnology manifesto.