President Bush signed legislation authorizing a $368 billion defense budget for next year, a week after it won House and Senate approval in a rare show of bipartisan support. The signing came as Senate Republicans called for urgent passage of $87 billion in funding for Iraq and Afghanistan. In a possible snag, Sen. Byron Dorgan (D) of North Dakota proposed making some of the money available as long-term loans. White House press secretary Scott McClellan said Bush is "listening" to such suggestions, but believes grants are the right approach.

In a related development, Iraq weapons inspector David Kay will tell Congress that Saddam Hussein may have been bluffing when he authorized use of weapons of mass destruction against invading US troops, The Washington Post reported. Bush accused the former Iraqi leader of issuing such an order shortly before the war began in March. Kay is expected to present an interim report Thursday on his investigation into Iraq's alleged weapons programs.

Independent candidate Arianna Huffington dropped out of California's gubernatorial recall race late Tuesday. Appearing on CNN's "Larry King Live," she said she'd focus "every ounce of my time and energy" to defeating the Oct. 7 vote to oust Gov. Gray Davis (D), to prevent actor Arnold Schwarzenegger from taking his place. Schwarzenegger seized the lead in recent opinion polls on recall candidates, while Huffington consistently lagged.

After four months of deliberations, a jury acquitted three former police officers from Oakland, Calif., on eight counts Tuesday in a major corruption trial. The judge declared a mistrial on 27 other counts because jurors were deadlocked. Matthew Hornung (above, c.), Clarence Mabanag, and Jude Siapno were accused of beating and planting evidence on dozens of suspects - most of whom were black - and conspiring to cover up their actions. A fourth ex-officer is believed to have fled to Mexico.

America Online launched a new Spanish-language service, looking to the nation's largest minority group to bolster its subscriber base. AOL Latino will cost the same as standard AOL but will contain specialized content and links to major newspapers in Latin America, its general manager said. AOL is the world's largest Internet service provider.

Despite claims to the contrary, public school students are not facing a big increase in homework, new studies indicate. A report by the Brookings Institution, a Washington think-tank, found pupils doing an average of about 19 minutes a night in 1997, a three-minute jump from 1981. Meanwhile, research by the RAND Corp. found only about one in 10 students has more than two hours of homework. Many educators consider 10 minutes per grade level to be appropriate.

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