The federal government ran a $60 billion deficit in June and is already more than $900 billion in the red this fiscal year, but there is some bright news: basic government spending appears to be dropping, the Congressional Budget Office estimated Monday.

CBO said the government has paid out $2.7 trillion so far in fiscal year 2012, about the same level as it had by this point in fiscal year 2011. But when technical adjustments from the 2008 Wall Street bailout are subtracted, spending has actually dropped 2 percent.

That news comes after a year and a half of fierce battles between Republicans on Capitol Hill, who have fought for deeper spending cuts, and President Obama, who has fought for more money for his priorities.

CBO said Medicaid, education and unemployment benefit spending are both down significantly, chiefly because Mr. Obama's stimulus has winded down and its higher spending levels are expiring. Defense spending is also down in 2012...

The elementary school daughters of a soldier paralyzed in Afghanistan were punished for wearing t-shirts that bore the logo of an organization that provides homes for severely wounded veterans, according to their mother. However, the Texas school district said it has absolutely nothing to do with the logo — and everything to do with the dress code.

The girls, in first grade and fourth grade at Masters Elementary School, were wearing t-shirts provided by “Homes For Our Troops.” Their mother, Josie Perez-Gorda, said they had recently received word that the organization might be offering the family assistance in building a home that would be safe for her husband.

Army Spc. Justin Perez-Gorda was injured by a road-side bomb in Afghanistan, she told San Antonio television station KENS.

“These guys are fighting for our country and they should be able to wear something that honors their parents, especially if they are wounded,” Perez-Gorda told the television station...

President Obama's State of the Union blueprint for economic recovery relies heavily on government intervention and tax hikes on the wealthy, but will likely do little to lower the temperature in Washington or gain traction in an election year, say lawmakers and analysts who wonder why the president didn't address the most critical factor for growth -- eliminating debt.

President Obama heads out on the road Wednesday to visit battlegrounds states where he will try to sell his agenda, and his reelection bid, outlined in a lengthy address to Congress and the nation on Tuesday night.

In an ambitious speech that focused on manufacturing, clean energy investment and educational training as economic opportunities, the president said he wants to return America to prosperity by eliminating inequalities that he claims favor the rich at the expense of the rest. He prioritized extending a payroll tax cut and suggested raising the rates on wealthy Americans to pay for it.

The law school at the University of Mississippi played host last night to a discussion about the Personhood Amendment which will be on the state ballot next Tuesday. Proposition 26 defines human life to begin at conception. However, at last night's forum only those who oppose the amendment were invited to speak -- which upset some in attendance.

A panel of anti-Proposition 26 activists addressed the audience who gathered Tuesday evening in the Robert C. Khayat Law Center, arguing what they believe are the legal consequences of the measure. Steve Crampton, who designed the language of the initiative and serves as legal counsel for the Mississippi's Personhood Amendment, spoke with OneNewsNow following the forum.

The Supreme Court is taking its first hard look at how far government may intrude on the relationship between religious organizations and their employees.

The justices are hearing arguments Wednesday in a workplace dispute between a Lutheran school and a fired teacher. The case is being closely watched by religious institutions concerned about their independence, and by civil rights groups looking out for employees.

The issue in the dispute between the Hosanna-Tabor Evangelical Lutheran Church and School of Redford, Mich., and former teacher Cheryl Perich is whether she has the right to sue the school for retaliating against her after she complained of discrimination under the Americans with Disabilities Act.

Many federal courts have recognized a so-called ministerial exception that keeps them from interfering with church affairs. But in this case, a federal appeals court said Perich's job as a teacher was secular, not religious, so the exception didn't apply.

To school teacher Isaac Moffett, the Bible is not just a religious document.

“It’s so much more,” he said. "It’s a primary source of history. It’s a primary teaching source of actually people who lived during the time period.”

Moffett is making his case as he walks across a dirt field in Nampa, Idaho.

“This used to be our campus,” he said. “This is where the classrooms were. Everything was right here.”

That was last year. This year it’s all gone, and all because Moffett and his fellow teachers used the Bible and other “religious texts” in their classrooms.

It’s a shocking set of circumstances that has one of the most conservative states in the country defending one of the most liberal views of the Constitutional separation between church and state.

At issue is the Nampa Classical Academy, a charter school, founded by Moffett in 2009.

U.S. schools have banned more than 20 books and faced more than 50 other challenges this year, the American Library Association reports, and many more are expected this fall.

“By far our busiest time is the early fall,” says Angela Maycock of the association’s Office for Intellectual Freedom. “When students go back to school, we see a real upswing in complaints.”

There is intense debate over whether those challenges involve censorship or are just parents seeking age-appropriate reading material...

The battle between supporters of creationism and evolution made its way onto the 2012 campaign trail Thursday as a young boy, prompted by his mother, asked Texas Gov. Rick Perry questions on the subject, leading Perry to suggest both are taught in Texas public schools.

"How old do I think the Earth is?" Perry said repeating the boy's question. "I have no idea - it's pretty old. It goes back a long way - I'm not sure anyone knows really completely know how old it is."

But Perry continued, saying the boy's mother was really trying to get a response about creationism and evolution. While Texas public schools don't officially teach creationism, some claim Perry has pushed a weakened evolution curriculum to open the door for creationism in schools...

SACRAMENTO, Calif. – California lawmakers on Tuesday sent the governor a bill that would make the state the first requiring public schools to include the contributions of gays and lesbians in social studies curriculum.

The bill, passed on a party-line vote, adds lesbian, gay, bisexual and transgender people as well as people with disabilities to the list of groups that schools must include in the lessons. It also would prohibit material that reflects adversely on gays.

Democratic Assemblyman Tom Ammiano of San Francisco says SB48 is crucial because of the bullying that happens to gay students. Republicans called it a well-intentioned but ill-conceived bill and raised concerns that it would indoctrinate children to accept homosexuality...

Supporters of school choice are celebrating a huge victory at the U.S. Supreme Court in a case involving an Arizona scholarship program.

America's high court voted 5-4 Monday afternoon to dismiss a lawsuit by the American Civil Liberties Union against an Arizona program that promotes school choice. The program, like others across the country, allows state residents to claim a tax credit for donations to private organizations that provide scholarships to religious and other private schools. In Arizona's case, taxpayers can direct up to $500 they would have paid in state income taxes to fund those scholarships...