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Clinton Ready To Cut Medical Programs President Will Propose Reductions For Both Medicare And Medicaid

After blistering Republican plans to trim Medicare and Medicaid, and riding the rhetoric to re-election, President Clinton is taking his own scalpel to the massive programs.

Democrats may be unhappy, but that apparently is a price Clinton is willing to pay for a balanced budget.

The president proposed similar reductions in 1995 and 1996, but deeper cuts offered by GOP lawmakers allowed Clinton to declare himself the election-year champion of health care to the poor, disabled and elderly. Republicans accused Democrats of distorting the record.

“Mediscare! Mediscare! Mediscare!” Republican rival Bob Dole bellowed again and again on the campaign trail. Heading to the voting booths, few people realized that Clinton wanted to cut the health care programs, Republicans complained.

This time, it will be hard not to notice: Clinton is required by law to produce a budget plan, forced by political reality to introduce one that balances and, aides say, bound by economic forces to cut Medicare and Medicaid to do it.

In other parts of the budget, according to officials familiar with it, the White House will propose:

Adding back as much as $16 billion to the revamped welfare program to restore benefits to legal immigrants who became disabled after entering the country and to provide more for food stamps. There also would be $3.4 billion for an initiative aimed at moving welfare recipients into jobs.

Trimming $5 billion from this year’s military budget, to a total of about $260 billion for fiscal 1998.

Republicans are sure to fight on both counts.

On Medicare and Medicaid, the Republicans will let Clinton make the first move. Even as they promise to work with Democrats on any serious balanced-budget efforts, they welcome the prospect of him sweating those particular cuts.

“Now that Bill Clinton can’t ever run for re-election, perhaps he will put the political charades behind him,” said Haley Barbour, Republican National Committee chairman. “But America can’t afford another phony political gesture.”

White House officials, speaking on condition of anonymity, said Clinton’s Feb. 6 budget submission is expected include:

Reductions in payments to health maintenance organizations, doctors and hospitals to save about $100 billion from the giant Medicare program over the next five years. Medicare provides health insurance for the elderly and disabled.

A per-capita limit on the growth of Medicaid, which provides health care to the poor. Under the plan, states would receive a set amount of federal money for each person in their Medicaid programs. But Medicaid spending would not be allowed to grow faster than the nation’s percapita economic output.

Both items are drawn heavily from balanced-budget proposals offered by Clinton in 1995 and 1996.

Under both Clinton’s and the Republicans’ proposals, Medicare and Medicaid spending is projected to rise in future years. The two plans differ, however, in how much they would trim these projected increases to achieve the savings needed to balance the budget.

On Medicare, the president’s election-year budget plan proposed $124 billion in savings over six years, only $40 billion less than Republicans.

On Medicaid, the president had offered a per-capita cap as an alternative to GOP plans to slap an overall limit on Medicaid funding to each state. The per-capita cap would allow states to increase their funding proportionately if poverty rolls swell.

Still, Democrats fear that faster-than-expected increases in medical costs would force deep cuts in Medicaid under the per-capita cap.

Though most of the complaints are made in private, liberal members of Clinton’s own party have begun asking why the White House would make the proposal so early - cashing in a valuable bargaining chip.

For now, the criticism is muted. Lawmakers are taking a wait-and-see position until the budget is made public.