Budget-Cutters Eye Medicare, Medicaid

SO far, Republicans have focused budget cutting plans on so-called discretionary spending -- items such as federal aid to education or agricultural research.

But as the weather warms up, the next round of proposed reductions will have to focus on big entitlement programs, particularly Medicare and Medicaid, warns a key member of the House GOP leadership.

This week, Rep. John Kasich (R) of Ohio, chairman of the House Budget Committee held a series of hearings on the future of entitlements. Testimony clearly showed, among other things, that Medicare will go bankrupt in six years if nothing is done, said Mr. Kasich at a Monitor breakfast.

''We either have to cut 40 percent from benefits, or increase spending substantially to keep the system sound,'' he said.

Last week, Kasich and his panel released a list of some $100 billion in illustrative cuts they propose in discretionary programs. Their next round of proposed reductions, in May, will involve entitlements, according to the committee chief.

To make the cuts, said Kasich, ''I get the feeling we'll rely heavily on privatizing'' certain aspects of Medicare, for example.

The Clinton adminstration's plans have yet to address Medicare's real problems, said Kasich.

The boyish Kasich, a key figure in the GOP drive to corral the federal budget, said he's not worried about polls showing that support for the GOP's Contract With America may be declining.

Despite his zeal for balancing the federal budget, he said he remains committed to a tax reduction this year. ''We're doing the right thing by giving out tax relief for families,'' he said. ''I believe families are the building block.''

A large effect of tax cuts would be to shift more money, and hence power, out of Washington, D.C., and back to the states, according to Kasich. And that's what much of the current political battle is about, he said -- the decentralization of power in America.

He claimed that ''all this stuff about class warfare is bunk.'' According to Kasich, voters don't respond to Democratic claims that the Republican program benefits the rich at the expense of the poor. ''Only guilty rich people don't like rich people,'' he said.