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WASHINGTON - Although the nation's oldest airlines have slashed operating costs by 14.5 percent in less than three years, they are sinking into deeper financial trouble, the General Accounting Office told Congress yesterday. Unless the big carriers squeeze costs much more, "they are unlikely to be able to improve their financial condition" and avoid bankruptcy, GAO official JayEtta Hecker said in the report she presented to the House Aviation Subcommittee. Senior airline executives said Congress should help carriers by cutting taxes and fees.

WASHINGTON - Consumers face higher gasoline pump prices today in part because a wave of oil industry mergers over the past decade reduced competition, according to a newly released government study. The merger of oil giants Exxon and Mobil in 1999 - when the two companies were Nos. 1 and 2 in the industry - added up to 5 cents to the price of a gallon of gasoline sold by the combined company. The General Accounting Office, an arm of Congress, looked at eight major oil industry mergers between 1994 and 2000 and found that six of them led to higher gasoline prices.

WASHINGTON - Key elements of a U.S. national missile defense system scheduled for initial deployment later this year have not been tested under realistic conditions, making it difficult to assess their ability to perform, U.S. congressional investigators have found. The conclusion made by the General Accounting Office, the investigative arm of Congress, comes as the Bush administration is forging ahead with deployment of the multi-layered system designed to protect the United States from missiles launched by rogue states such as North Korea and Iran.

WASHINGTON - The head of Congress' auditing arm warned yesterday that "imprudent and unsustainable" federal borrowing is driving the nation toward a fiscal crisis. The comments by David M. Walker, head of the General Accounting Office, come as a number of conservatives have begun to criticize the Bush administration and the Republican-led Congress for failing to hold the line on spending. Both branches of government are blinded by political "nearsightedness and tunnel vision" and are failing to see that government borrowing is out of control, Walker said at a breakfast meeting with reporters.

WASHINGTON - A Chinese woman once hailed as a human rights hero pleaded guilty yesterday to illegally selling advanced technology to China's military. Zhan Gao, a permanent U.S. resident, became a cause celebre two years ago when she was arrested while visiting China and jailed on charges of spying for Taiwan. Gao was allowed to return to the United States after five months, but only after intense pressure from human rights activists and the U.S. government, including a phone call to Chinese President Jiang Zemin from President Bush.

Recruited athletes at U.S. military academies have lower admissions scores, get lower grades on campus, and are less likely to graduate than the class as a whole, according to a report issued yesterday by the General Accounting Office, the investigative wing of Congress. The report said that while some differences in student performance were statistically significant, they were "not sizable," generally falling within 10 percent of the class average. It stopped short of calling for changes in admission or recruiting, drawing a rebuke from the congressman who requested the study.

A $6.6 billion combined aid package for Micronesia and the Marshall Islands won't keep pace with inflation during the next 20 years and will ultimately produce a substantial cut in the per capita aid to the two impoverished nations, a U.S. General Acounting Office official testified yesterday. Susan S. Westin, the GAO's managing director of international affairs and trade, told the House subcommittee on Asia and the Pacific that an analysis of the proposed aid packages negotiated with the two countries as part of a revised Compact of Free Association shows that even with the creation of trust funds, the countries will face substantial cuts.

WASHINGTON - The Bush administration's breakneck effort to field a rudimentary missile defense system by 2004 is moving so fast that the Pentagon may end up with unworkable hardware that needs to be redesigned at a steep cost, Congress's independent watchdog agency warned yesterday. In the first official, unclassified challenge to the administration's plans, the General Accounting Office said in a report that the Pentagon's use of new and little-tested anti-missile technology puts the program "in danger of getting off track early and impairing the effort over the long term."

WASHINGTON - Nearly two years after rail cars carrying hazardous chemicals accidentally derailed and burned inside a Baltimore tunnel, the federal government still has no plan for the security of hazardous rail shipments, the investigative arm of Congress has concluded. In a report released yesterday by Rep. Elijah E. Cummings, a Baltimore Democrat, the General Accounting Office said the Department of Homeland Security is developing a security plan that focuses on intermodal transportation.

Programs meant to ease the hardships on military reservists and their families don't go far enough, threatening the viability of the National Guard and Reserves even as the country increases its reliance on them, says a congressional investigator leading the first major survey of reservists' pay and benefits since the Sept. 11 attacks. Derek B. Stewart, director of military and civilian personnel issues at the General Accounting Office, the investigative arm of Congress, said yesterday that his researchers have found serious shortcomings in programs to help reservists with finances, health care, family support and relations with their employers.