Figured it out... the brute force way. Added 1st and last line to index template. key = 2 is the news widget.
Code:
<{if $key ne 2}>
<!-- BEGIN WIDGET: <{$item[title]}> -->
<td width="50%"><table cellspacing="3" cellpadding="1" width="100%" border="0">
<tbody>
<tr>
<td valign="top" width="15" nowrap><a href="<{$item[link]}>"><img src="<{$item[icon]}>" border="0"></a></td>
<td width="98%" align="left" valign="top"><a href="<{$item[link]}>" id="moduletitle"><strong><{$item[title]}></strong></a><br />
<span class="smalltext"><{$item[description]}></span></td>
</tr>
</tbody>
</table></td>
<!-- END WIDGET: <{$item[title]}> -->
<{/if}>