Budget Highlights

Highlights of the House-Senate bill to balance the budget in seven years:

Medicare. Reduces projected spending by $270 billion over seven years by encouraging seniors to move into managed-care plans and limiting payments to doctors and hospitals.

Medicaid. Reduces projected spending by $163 billion over seven years by giving states more control of the program and letting them determine eligibility. Retains federal nursing-home standards, but gives states greater flexibility.

Student loans. Reduces projected spending by $4.9 billion over seven years by limiting direct student loans and increasing costs to lenders in the guaranteed student-loan program.

Welfare. Replaces the federal welfare program with grants to states. Gives states discretion on eligibility, allows them to bar aid to children born to poor unmarried women under age 18.

Tax credit. Provides $500-per-child tax credit for incomes up to $75,000 for individuals and $110,000 for joint filers. A $125 credit would be available for 1995.

Capital gains. Reduces the maximum capital-gains tax rate for individuals to 19.8 percent from 28 percent, effective Jan. 1.

Earned income tax credit. Imposes a benefit ceiling on the credit for one-child workers who make up to $23,230 and two-child workers who make up to $26,730.

Agriculture. Cuts $12.3 billion, or 16 percent, from growth in farm program spending over seven years. Nearly $9 billion comes out of major crop subsidies.

Environment. Places enforcement of some existing EPA regulations on hold; cuts EPA budget; provides for the sale of oil-drilling leases in the Arctic National Wildlife Refuge; exempts oil companies from paying government royalties on deep water drilling in the Gulf of Mexico; continues the controversial sale of mining rights on federal land.