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AP Top News at 2:44 p.m. EDT(Associated Press Via Acquire Media NewsEdge) Government sues to block AT&T, T-Mobile mergerWASHINGTON (AP) _ The Justice Department filed suit Wednesday to block AT&T's $39 billion deal to buy T-Mobile USA on grounds that it would raise prices for consumers. The government contends that the acquisition of the No. 4 wireless carrier in the country by No. 2 AT&T would reduce competition and that would lead to price increases. East struggles to recover from IreneKILLINGTON, Vt. (AP) _ Only one flooded Vermont town remained cut off from the outside world Wednesday, but National Guard helicopters were still dropping food and water on storm-ravaged parts of the state as the Eastern seaboard labored to recover from hurricane-turned-tropical-storm Irene. About 2 million people remained without power in water-logged homes and businesses from North Carolina through New England, where the storm has been blamed for at least 45 deaths in 13 states. Raging floodwaters continued to ravage parts of northern New Jersey on Wednesday morning, even after the state's rain-swollen rivers crested and slowly receded. Libyan rebels: Gadhafi son offers to surrenderTRIPOLI, Libya (AP) _ Moammar Gadhafi's son al-Saadi is trying to negotiate the terms of his own surrender, the rebel commander in Tripoli told The Associated Press on Wednesday in what would be a major blow to the Libyan leader's crumbling regime. The commander, Abdel Hakim Belhaj, said al-Saadi first called him Tuesday and asked whether his safety could be guaranteed. "We told him 'Don't fear for your life. We will guarantee your rights as a human being, and will deal with you humanely,' said Belhaj, confirming a report on Al-Jazeera television. Belhaj added that al-Saadi would be turned over to Libyan legal authorities after his surrender. Unemployment rates fell in most US cities in JulyWASHINGTON (AP) _ Unemployment rates fell in a majority of U.S. cities in July, despite a weak economy that is producing few jobs. The Labor Department said Wednesday that unemployment rates dropped in 193 large metro areas, increased in 118 and were flat in 61. That's a sharp change from June, when unemployment rates rose in more than 90 percent of metro areas. Panel: Widespread waste and fraud in war spendingWASHINGTON (AP) _ The U.S. has lost billions of dollars to waste and fraud in Iraq and Afghanistan and stands to repeat that in future wars without big changes in how the government awards and manages contracts for battlefield support and reconstruction projects, independent investigators said Wednesday. The Wartime Contracting Commission urged Congress and the Obama administration to quickly put in place its recommendations to overhaul the contracting process and increase accountability. The commission even suggested that the joint House-Senate debt reduction committee take a close look at the proposals. Inside the spy unit that NYPD says doesn't existNEW YORK (AP) _ Working with the CIA, the New York Police Department maintained a list of "ancestries of interest" and dispatched undercover officers to monitor Muslim businesses and social groups, according to new documents that offer a rare glimpse inside an intelligence program the NYPD insists doesn't exist. The documents add new details to an Associated Press investigation that explained how undercover NYPD officers singled out Muslim communities for surveillance and infiltration. Court: Daughter can't receive dead dad's benefitsDES MOINES, Iowa (AP) _ A federal appeals court has ruled that an Iowa girl conceived through artificial insemination after her father's death cannot receive his Social Security benefits. The 8th U.S. Circuit Court of Appeals' decision reversed a district court ruling that granted benefits to the girl, who is now 8. The appeals court ruled Monday that she did not meet eligibility requirements under Iowa law. Ancient humans used hand axes earlier than thoughtLOS ANGELES (AP) _ Ancient humans fashioned hand axes, cleavers and picks much earlier than believed, but didn't take the stone tools along when they left Africa, new research suggests. A team from the United States and France made the findings after traveling to an archaeological site along the northwest shoreline of Kenya's Lake Turkana. Two-faced blades and other large cutting tools had been previously excavated there along with primitive stone flakes. Mel Gibson to pay ex $750K to settle custody caseLOS ANGELES (AP) _ Mel Gibson will pay $750,000 to his ex-girlfriend and continue to provide housing and financial support for their young daughter to resolve a bitter, long-running legal fight, a judge said Wednesday. The settlement is intended to end the bickering and accusations that have permeated the case handled in mostly secret proceedings for more than a year, Superior Court Judge Peter Lichtman said. Texas A&M plans to leave Big 12 by July 2012HOUSTON (AP) _ Texas A&M dealt a blow to the Big 12 Conference on Wednesday, saying it plans to leave by July 2012 if it is accepted by the SEC or another league. The move, which had been expected, may set off another round of conference realignment in college sports. The Aggies have made it clear they want to join the 12-member Southeastern Conference and the Big 12 said again after the announcement that it will move swiftly to find at least one replacement for the Aggies. 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