USA

A key gauge of future economic activity crept higher for the fourth straight month in July, suggesting some improvement may lie ahead for the economy this fall. The New York-based Conference Board's Index of Leading Economic Indicators rose 0.3 percent to 109.9, the same as it rose in June. The index indicates where the overall US economy is headed in the next three to six months. It stood at 100 in 1996, its base year.

President Bush set off on a week-long tour of the heartland, with stops planned in Wisconsin, Missouri, and Pennsylvania - also crucial battleground states. Bush, who has been vacationing at his Texas ranch, is expected to outline plans to rev up the economy and will highlight his budget, Medicare, and Social Security priorities. After attending the Veterans of Foreign Wars convention in Milwaukee, he planned to speak at an Independence, Mo., high school today.

Medicare officials plan to issue new rules this week that would drastically reduce reimbursements for some outpatient procedures, the Los Angeles Times reported. The new rules, which would take effect Jan. 1, would save Medicare a substantial amount of money on payments for some 1,100 high-tech procedures, including chemotherapy or the implantation of pacemakers. A congressional directive to limit spending on high-tech medical care is driving the cutbacks, but some Congress members are seeking to delay their implementation until more information is available.

Bush doesn't plan to dip into the Social Security or Medicare portions of the budget surplus to cover government spending increases or tax cuts, no matter what predictions reveal, White House economic adviser Lawrence Lindsey said in an interview on ABC-TV. Democrats have said Bush's $1.35 trillion tax cut will force the administration to dip into those accounts to cover budget overruns. The White House will release tomorrow its new budget outlook, expected to show a revised surplus for 2001 of $160 billion, much lower than the $275 billion projected earlier, and reflecting the $38 billion in tax cuts this year.

The CIA provided sensitive military intelligence to the Croatian military to prepare it for a 1995 offensive to push Serb troops out of the border region of Krajina, Newsweek magazine reported. Pilotless drone aircraft photographed positions of Serb troops and weapons, allowing Croatian Gen. Ante Gotovina to aim his attack more effectively. The information is now coming to light at the UN war-crimes tribunal in The Hague, where Gotovina has been indicted for atrocities committed during the Krajina operation.

More than 30,000 people were charged with federal drug offenses in 1999 - double the number 15 years earlier, a Justice Department study reported. Nine out of 10 of those convicted were traffickers while only 4 percent were convicted of simple possession. The study also said offenders' average prison stay rose to 5-1/2 years in 1999 from 2-1/2 years in 1986, a result of stricter federal laws requiring mandatory minimum sentences for such crimes. Drug prosecutions made up 32 percent of all federal criminal cases in 1999, compared with 18 percent in 1984, the report said.

An Apache fire crew from Arizona succeeded in digging a 30-mile break line to protect more than 200 houses in Washington state's Cascade mountain region, including the tourist town of Leavenworth. Several other forest fires in the Northwest have retreated somewhat due to colder weather, experts said, but military personnel were dispatched to help 27,100 firefighters still battling 34 blazes burning across seven Western states and Texas.

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