The US trade deficit dropped by 4.1 percent to $56.8 billion in June, as an all-time high in exports offset a big surge in oil imports, the Commerce Department reported Tuesday. After adjusting for inflation, the deficit was the lowest monthly imbalance since December 2001.

In a California budget showdown, Gov. Arnold Schwarzenegger (R) sued Controller John Chiang (D), who has balked at carrying out the governor's order to cut the pay of about 175,000 state employees until a new budget is approved.

Most US companies paid no federal income taxes between 1998 and 2005, according to a congressional study that did not identify any corporations by name nor investigate specific reasons for the nonpayment by 1.2 million companies. Operating losses and tax credits may allow some companies to escape paying taxes, the study indicates.

A federal judge upheld a ban Monday on guns at Hartsfield-Jackson Atlanta International Airport, where some gun-rights groups contend concealed weapons are permitted in certain areas by state law.

Cindy Sheehan, a highly visible antiwar activist, gathered more than the 10,198 signatures needed to qualify her as an independent congressional candidate in California's 8th district, which includes most of San Francisco County. She is bent on ousting House Speaker Nancy Pelosi. Sheehan, whose son was killed in Iraq, says Pelosi has failed to block US funding for the war.

NASA plans to have Orion, a new spaceship for flying astronauts to the International Space Station, ready by 2014, a year later than scheduled because of funding and technical issues, officials said Monday. They also defended the safety of the Constellation return-to-the-moon program, which an agency safety panel has questioned.

Women hold 35 percent of governor-appointed posts in all 50 states, up from 28 percent a decade ago, the Center for Women in Government & Civil Society at the University of Albany (N.Y.) reports. Women increasingly serve in traditionally male-dominated administration and budget jobs.

Nebraska's small towns may be the smallest they've ever been, according to a population analysis by a University of Nebraska researcher and the Associated Press. The estimated median size of state towns is 320, down from an all-time high of 435 in 1920. Many are slipping toward a "frontier economy," with fewer wage-paying jobs and more self-employment. Above, Charles Schuett and his basset hound walk in downtown Maxwell, Neb. (pop. 315).

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