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BROWN meat in large skillet on medium-high heat; drain.
STIR in 2-3/4 cups water, salsa and chili powder. Bring to boil. Stir in macaroni; cover. Reduce heat to medium-low; simmer 8 to 10 minutes or until water is almost absorbed.
ADD VELVEETA; cook until melted, stirring frequently. Garnish with 1/2 cup crushed tortilla chips, 1/4 cup chopped tomato and 2 Tbsp. chopped green onion, if desired.