Republican cuts give Clinton a trump card

After sweeping almost all before it since last November's mid-term triumph, the Republican juggernaut is at risk of being stalled by a widening dispute over party plans to cut Medicare - essential if it is to keep its central electoral promise of reducing taxes and yet balancing the federal budget by 2002.

Thus far life in command of Capitol Hill has been relatively simple for the Republicans. The Speaker Newt Gingrich's House of Representatives kept its word by voting on the 10 articles of the Contract with America, including a $189bn (£117.4bn) five-year tax cuts package, and President Bill Clinton last month was reduced to pleading on television for his political ''relevance''.

But after six all-conquering months, times are changing. Abruptly, conservatives have been put on the defensive by the Oklahoma bombing, which has helped to nudge Mr Clinton's approval rating to nearly 60 per cent, close to the highest of his presidency. Further trouble is promised by Dr Henry Foster, the President's nominee for Surgeon-General, whose success at this week's confirmation hearings threatens to bring about an embarrassing rerun on the Senate floor of the great Republican schism on abortion.

But no problem looms larger than fulfilling the balanced budget promise. And no aspect of it will be politically more difficult, yet more necessary in financial terms, than dealing with Medicare, the federal health plan for elderly and disabled Americans which - unless taxes are raised or its benefits trimmed - is forecast to go bankrupt by that same year of 2002.

Next week, the first blueprint for a balanced budget will be put forward by the Senate Budget Committee chairman, Pete Domenici of New Mexico, seeking more than $1,000bn of cuts over seven years, with $250bn - the largest single share - coming from Medicare. But a furious reaction from senior citizens' organisations, a lobby eclipsing even Jewish interest groups or the National Rifle Association in terms of political clout, has sent the Republicans running for cover and handed Mr Clinton what Democratic strategists believe could be a trump card as he starts his campaign for re-election in 1996.

Neatly out-manoeuvring his foes, the President deflected an appeal from Mr Gingrich and the Senate majority leader, Bob Dole, for bipartisan talks on the Medicare issue, telling a White House conference on the problems of elderly people that he would not discuss Medicare reform until Republicans had agreed a balanced budget plan.

That task will be anything but easy: Mr Domenici, a fervent believer in spending reductions first, tax cuts later, is at odds with the presidential contender Senator Phil Gramm of Texas, who insists on an immediate start on the $189bn House proposal, and to a lesser extent with Mr Dole.

Worse still, Mr Clinton has been able to portray Republicans as the heartless party of the rich, using money saved by reducing benefits for the elderly to finance capital gains tax cuts and other largesse for the well off. The charge is naturally rejected by Messrs Dole and Gingrich, who accuse the President of playing cheap politics with the healthcare concerns of much of the population.

But thus far a buoyant and resurgent Mr Clinton clearly has the initiative - so much so that his two rivals were reduced to walking angrily out of a press conference this week, complaining that every question was about Republican plans for Medicare. To charges of political opportunism, the White House has a ready answer. Mr Clinton, it says, did indeed try to come to grips with Medicare problems, targeting it for $120bn of savings in his 1994 health reform plan - torn to shreds by the Republicans.