The Congressional Budget Office forecast a record $480 billion federal deficit for 2004 and a cumulative shortfall of $1.4 trillion over the next decade. The nonpartisan agency's bi- annual outlook took into account rising costs of military and rebuilding operations in Iraq. But even before the report was released, congressional Democrats said it underestimated the true size of the deficit, and they renewed criticism of the Bush administration's tax cuts and spending policies.

A seven-month review into the the shuttle Columbia disaster placed the blame on "ineffective leadership" at the NASA space agency, which it said is underfunded, driven by schedule, and doesn't pay enough attention to safety. "If these persistent, systemic flaws are not resolved, the scene is set for another accident," the 13-member investigation board said. As expected, the panel concluded that wing damage from a broken chunk of foam insulation was directly responsible for the shuttle's Feb. 1 breakup, which killed all seven crew members.

Under fire over mounting US deaths in Iraq, President Bush was to stress the need for sustained involvement - but not greater UN authority - in a speech after press time to the American Legion veterans convention in St. Louis. Bush will discuss the war on terrorism and "the importance of winning that war to the United States and to the world," press secretary Claire Buchan said. Speaking Monday to the Veterans of Foreign Wars in San Antonio, Democratic presidential contender Sen. John Kerry of Massachusetts criticized the president for placing "our men and women in uniform in increased harm's way."

Orders for durable goods rose 1 percent in July, adding to a 2.6 percent gain from the previous month, the Commerce Department reported. Excluding the volatile transportation sector, orders for costly manufactured items meant to last at least three years rose 1.7 percent in July, more than twice the amount economists had anticipated.

A strike by 1,300 public transit workers in Honolulu left thousands of people stranded on Hawaii's most populous island. Negotiators for the Teamsters Union and Oahu Transit Services failed to reach a deal by Monday's midnight deadline. The company's chief negotiator claimed union demands for better wages and benefits are unreasonable given a $6.8 million budget shortfall.

A Phoenix couple charged with keeping 5-year-old twins in filth-encrusted cages were ordered held on $243,000 bail each. Investigators said the boys were allowed out only a few hours a day when their mother came home from work. Estelvina Rodriguez told police the boys were locked up for their own safety because her husband, Louis, is ill and unable to watch them. The children and an older sibling were taken into state custody Saturday after their adult brother alerted an off-duty officer to conditions in the home.

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