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New budget estimates for the current fiscal year show the government will have to spend $9 billion of its $162 billion surplus set aside for Social Security to cover federal programs, the Congressional Budget Office reported. It blamed the shrinking surplus on the $1.35 trillion tax cut and a sluggish economy but said spending priorities still can be met at lower levels. The CBO predicted the government will return to a non-Social Security surplus of $2 billion in 2002, but projected $18 billion will have to be taken from the retirement program in 2003 as more tax cuts kick in.

Consumer confidence dropped for the second straight month in August, a sign of growing concern about a lack of jobs and the economy, the New York-based Conference Board reported. After gaining in May and June, its Consumer Confidence Index eroded to 114.3, down from 116.3 in July. The index is based on a monthly survey of 5,000 households and compares results with its base year of 1985, when it was 100. Consumer spending accounts for two-thirds of economic activity.

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A federal appeals court panel ruled unconstitutional a University of Georgia admissions policy that gives some students an edge because of their race. The decision by the 11th Circuit Court of Appeals in Atlanta upheld a lower-court ruling and dealt a blow to affirmative-action advocates, who argue that such policies help remedy prior discrimination and that campus diversity is a compelling state interest. Judges said the policy violated the Constitution's equal-protection clause. Under a 1978 Supreme Court ruling, colleges may not use racial quotas but may consider race in deciding on admissions.

Average scores on the Scholastic Aptitude Test college-entrance test taken by this year's high-school graduates improved one point from the year before, continuing a gradual trend upward over the past decade. The College Board said about 1.3 million students averaged 506 on the SAT's verbal portion, the highest since 1987. The average math score was 514, matching last year's 30-year high. It also said more minorities are taking college entrance exams than ever, comprising more than a third of all test-takers. But test results showed blacks and Hispanics still lag behind whites in their scores.

A news story on US Sen. Robert Torricelli (D) of New Jersey apparently prompted the Justice Department to secretly obtain home telephone records of an Associated Press reporter last May. US Attorney Mary Jo White of New York, who oversees a probe into Torricelli fund-raising, disclosed in letter to reporter John Solomon last week that she had subpoenaed his phone records. A story by Solomon quoted anonymous law-enforcement officials as saying Torricelli was recorded on a wiretap in 1996 discussing fund-raising with relatives of a Chicago organized crime figure. Officials can be prosecuted for disclosing such information.

Two air tankers battling wildfires in northern California collided while dumping fire retardant, killing both pilots. The 250-acre fire they were battling had burned four structures and threatened more than a dozen others. In Montana, just west of Glacier National Park, firefighters battling a 4,200-acre blaze were forced to pull back.


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