August 23, 1985

Orders for durable goods plunged 2.8 percent in July as both the military and civilian segments of the economy suffered declines, the Commerce Department said today. It was the biggest drop since March and provided further evidence that the hoped-for rebound in economic activity is not on the horizon, economists said. Separately, the Government said that consumer prices rose two-tenths of 1 percent in July, the same increase as in June and May. And prices in the New York-northeastern New Jersey metropolitan area rose one-tenth of 1 percent. [Page D3.] Durable goods orders have been weak for most of the year. With the military segment removed, orders have posted an anemic one-tenth of 1 percent monthly rise since January.

The Department of Health and Human Services is drafting a report to Congress recommending a major change in the way the Government pays physicians under Medicare, the health insurance program for the elderly. According to department officials, the report suggests that the Government establish standard Medicare payments for 6,000 procedures. The fees would be based on historical data showing how much doctors have charged, or how much Medicare has paid, for the services. This system would bring greater uniformity into payments under Medicare. At present there is, in effect, a different fee schedule for each doctor, and payments are calculated according to a complex formula taking account of the physician's customary charges as well as the prevailing charges in an area.

An item in the Sports People column yesterday on the Masters Games in Canada incorrectly reported the amount of a Government grant to the games.

President Reagan, in a speech that reinforced the Administration's toughening posture toward the Soviet Union, today strongly defended plans to develop a defensive weapons system in outer space. His remarks were a strong reaffirmation of his commitment to the weapons project, and they came after a week of sharp exchanges and other developments that appear to have further chilled relations between the United States and the Soviet Union. Speaking here at a fund-raising affair for the Republican Party of California, Mr. Reagan said the proposed Strategic Defense Initiative, widely known as Star Wars, offered ''us a way out of our nuclear dilemma, the one that has confounded mankind for four decades.''

For the first time, changes in the acidity of rainfall have been directly linked to changes in pollution emissions hundreds of miles away, according to a new scientific report. The existence of such a correlation has been the subject of intense debate, and drafts of the report, which is being published today, have already stirred more controversy. Government experts questioned its conclusions, while other scientists said the report represented a major advance in acid-rain research. The Reagan Administration has maintained that too little is known about acid rain to justify costly efforts to contain it.