TOP STORIES:

BUDGET BATTLE

WASHINGTON — Senate leaders are closing in on an agreement to reopen the government and forestall an economy-rattling default on U.S. obligations. Congressional aides predict a deal could be sealed Tuesday, just two days before the Treasury Department says it will run out of borrowing capacity. AP Photos. AP Video.

OBAMA-BUDGET CONSEQUENCES

For President Barack Obama, the outcome of this week's fiscal fights with Republicans could have broad consequences for his stalled second-term agenda. A favorable deal for the White House might give Obama an opening to marginalize the tea party Republicans who have tried to win concessions from him in order to reopen the government and raise the nation's debt ceiling. But if no agreement is reached by Thursday's debt limit deadline, Obama will become the first modern president to preside over a government default, a dubious distinction with potentially calamitous economic consequences that could consume the White House for the foreseeable future. By White House Correspondent Julie Pace.

US DEFAULT-NOT THE FIRST

WASHINGTON — The same proud claim is made every time Washington wrestles with the debt limit: The United States has never defaulted. But the record's not that clean. America has stiffed creditors on at least two occasions.

MEXICO-EXTORTION WAVE

MEXICO CITY — Shakedown rackets, which have long targeted Mexico's shadier places, are increasingly going after mainstream businesses. Experts say it's a byproduct of the crackdown on drug cartels that has left hundreds of lower-level gunmen and traffickers looking for new sources of income. By Mark Stevenson. AP Photos.

TERROR TRIALS

WASHINGTON — Four years after his failed effort to bring the 9/11 mastermind to New York for trial, President Barack Obama has reinstated the federal courthouse as America's preferred venue for prosecuting suspected terrorists. His administration has done so by quietly securing conviction after conviction in the civilian judicial system. Meanwhile at Guantanamo Bay, Cuba, admitted 9/11 mastermind Khalid Sheikh Mohammed's case moves at a snail's pace. Tuesday's expected arraignment of suspected al-Qaida member Abu Anas al-Libi is the latest example of Obama's de facto policy. Al-Libi was captured in a military raid in Libya earlier this month and had been under interrogation aboard a U.S. warship with his fate uncertain. By Eileen Sullivan.

JAMAICA-DOPING PROBE

The world's anti-doping authority launches an audit of Jamaica's drug-testing agency following allegations its policing of the island's sprinting superstars led by Usain Bolt all but collapsed in the months before they dazzled at the London Games, The Associated Press has learned. By John Leicester. AP Photo.

JUSTICE-ODEH

WASHINGTON — Civil rights groups and members of Congress are pressing the Justice Department to renew its investigation of a 1985 office bombing that killed Palestinian-American civil rights leader Alex Odeh and injured seven people. By Stacy A. Anderson.

VENEZUELA-GUYANA-SHIP DETAINED

CARACAS, Venezuela — The top diplomats of Venezuela and Guyana agree to meet to discuss the fate of an oil research ship seized in disputed waters as the captain of the U.S.-chartered vessel is charged in Venezuela with violating its maritime economic zone. By Jorge Rueda. AP Photos.

UN-THAI PRINCESS

UNITED NATIONS — A Thai princess who became a criminal prosecutor and launched a campaign to help incarcerated women is now embarking on a global campaign to promote the rule of law and make "equal justice" a U.N. goal. By Edith M. Lederer. AP Photo.

AGING AMERICA-DELAYING RETIREMENT

CHICAGO — Older Americans, stung by a recession that sapped investments and home values, but expressing widespread job satisfaction, appear to have accepted the reality of a retirement that comes later in life and no longer represents a complete exit from the workforce. Some 82 percent of working Americans over 50 say it is at least somewhat likely they will work for pay in retirement, according to a poll released Monday by the Associated Press-NORC Center for Public Affairs Research.

ANTIGUA-SELLING CITIZENSHIP

KINGSTON, Jamaica — The struggling country of Antigua & Barbuda has joined other tiny eastern Caribbean islands in selling citizenship to wealthy international investors to drum up revenue, officials say. By David McFadden.

CHEMICALS-FERTILITY

BOSTON — New research suggests that high levels of BPA, a chemical in many plastics and canned food linings, might raise the risk of miscarriage in women prone to that problem or having trouble getting pregnant. By Chief Medical Writer Marilynn Marchione. AP Photo. AP Video.

BOLIVIA-VICUNEA ROUNDUP-PHOTO GALLERY

UCHA UCHA, Bolivia — The roar of motorcycles shatters the quiet of the wind-swept Andean plain as Aymara villagers conduct a frenetic chase to round up wild vicunas for shearing. The fur is one of the world's most expensive wools, and the harvest provides needed income for the people of Ucha Ucha, who live in the poor growing lands of Bolivia's flat, treeless altiplano. By Juan Karita and Carlos Valdez. With photo gallery by Juan Karita.

BUSINESS AND FINANCE:

WALL STREET

NEW YORK — Stocks rose Monday, helped by signs that Washington was moving closer to a deal that would avert a default by the U.S. government. By Markets Writer Ken Sweet.

DEBT DEFAULT-CONTINGENCY PLANS

NEW YORK — Warren Buffett likens it to a nuclear attack. Economists warn that government spending on programs like Social Security would plunge. The Treasury says the U.S. economy would slide into a recession worse than the last. Yet you wouldn't know that a U.S. debt default could amount to a nightmare from the way many companies and investors are preparing for it: They aren't. The assumption seems to be that in the end, Washington will find a way to avert a default. By Business Writer Bernard Condon.

MICROSOFT-WINDOWS PHONE

NEW YORK — Microsoft is updating its Windows software for cellphones to accommodate larger devices and make it easier for motorists to reduce distractions while driving. By Technology Writer Anick Jesdanun. AP Photo.

FORD-BATTERY LAB

ANN ARBOR, Michigan — Ford Motor Co. and the University of Michigan are opening a new battery research and manufacturing lab that they hope will speed the development of batteries for electric and hybrid cars. By Auto Writer Dee-Ann Durbin.

BLACKBERRY LETTER

TORONTO — BlackBerry is publishing an open letter in major publications around the world in a bid to reassure customers that they can count on the distressed smartphone company. By Rob Gillies.

ARTS AND ENTERTAINMENT:

FILM-CARRIE

LOS ANGELES — In the latest take on the paranormal coming-of-age story "Carrie," beleaguered high school student Carrie White's torment doesn't just occur within the gym showers or on stage at prom. It's also online, one of a few modern updates dropped into filmmaker Kimberly Peirce's reimagining of Stephen King's landmark 1974 novel. By Entertainment Writer Derrik J. Lang. AP Photos.

Q&A-TAYLOR SWIFT

NASHVILLE, Tennessee — Songwriting is the topic of the moment for Taylor Swift. The 23-year-old pop star was honored for a record sixth time as songwriter-artist of the year by the Nashville Songwriters Association International, surpassing guys like Vince Gill and Alan Jackson. She earned the award with 14 hits in the top 30 over the last year, a tribute to the popularity of her multiplatinum fourth album, "Red." As Swift accepts the award, she's six months deep in the songwriting process for her next album. By Music Writer Chris Talbott. AP Photo.

VERDI's 200th-RECOMMENDED RECORDINGS

The 200th anniversary of Giuseppe Verdi's birth is being celebrated this month. Of the more than two dozen operas he composed, here are 10 The Associated Press recommends. By Ronald Blum. AP Photo.

LOUIS ARMSTRONG MUSEUM-ANNIVERSARY

NEW YORK — To mark the 10th anniversary of the Louis Armstrong museum in the modest brick house where he lived for 28 years, curators are unveiling one of the jazz trumpeter's most unusual artifacts — a plaster mask that had been stored in a cupboard for decades. By Ula Ilnytzky. AP Photos.

FEATURES:

TRAVEL-PENSACOLA REVITALIZATION

PENSACOLA, Florida — For decades, Pensacola's quiet downtown was overlooked by tourists lured instead to the sugary white sands of the nearby beaches. But a major push to revitalize the long-neglected business and office district is slowly bringing visitors back downtown. By Melissa Nelson-Gabriel. AP Photos.