The Republicans, inspired by Newt Gingrich, advocate cutting taxes and trimming government but protecting Social Security and Medicare while reducing the deficit and promising to balance the budget.

The Democrats, frightened by the Speaker-to-be from Georgia, advocate . . . well, much the same.It is an amazing combination of objectives.

And a lot of people who study the possibilities agree that much the biggest problem is going to be paying ever-larger bills for retired elders on Medicare and poor children and adults on Medicaid.

Sen. John D. Rockefeller IV, D-W.Va., head of the Alliance for Health Reform, noted Tuesday that the cost of health programs is approaching 20 percent of the entire federal budget. And health care is the runaway fastest-growing item in the budget.

"With Social Security off the table, Medicare and Medicaid become the chief target to many who want lots of money to pay for tax cuts or deficit reduction or other agendas," Rockefeller said at a briefing held by the alliance.

Given the recent failure of President Clinton's commission to agree on comprehensive entitlement policy for the future, along with the failure of Congress to pass the administration's health-care bill, the nonpartisan alliance will stay in action to promote health-care reform whenever the subject comes up. It will come up a lot as entitlement costs balloon the budget going into the next century.

Rudolph Penner, the Republican director of the Congressional Budget Office from 1983 to 1987, spoke at the briefing. He found it "quite remarkable" that the leaders of America "would be talking tax cuts at this time."

By clear implication, he criticized Republicans and Democrats alike who put slightly lower tax payments by the middle class ahead of a mounting crisis of health-care funding for middle-class and poor, young and old, with their mix of Medicaid and Medicare, employers' pensions, private policies subject to cancellation, and no medical coverage at all.

The number of Americans without medical coverage is 40 million and increasing. Meanwhile, medical costs go up by 8 percent to 9 percent a year, while gross domestic product grows at about 5 percent.

Penner said the federal deficit, recently reduced three years in a row, will increase again through the last half of the 1990s. He continued: "That is largely because accelerating health costs begin to overwhelm . . . favorable demographics (an elderly population that has been relatively small). But after 2005, worsening demographics are superimposed on worsening health costs and the deficit truly explodes."

"The nefarious thing about deficits," he said, "is that they do their damage over a very long period . . . (and) the really bad effects will not be felt until our children are well along into their careers.

"Now, it might be asked, what have our children done for us lately? With a little bit of luck, they will be somewhat richer than us anyway. So why not rob them a little?"

As a matter of fact, up to now, "each generation of Americans has added greatly to the nation's wealth . . . so that their children on average enjoyed a much better life. Our generation is leaving a paltry sum by comparison."

Private saving is so low and public deficits so high, Penner said, that per capita wealth is barely increasing. The deficits of the 21st century "can reach a point that causes the national debt to grow so fast that interest payments outrun your ability to raise taxes and cut programs. When that occurs, there is little choice but to begin to finance government by printing money."

He had an anecdote: "When I worked in Uzbekistan (in the former Soviet Union) last summer, the inflation rate was 50 percent per month and I had to carry three pounds of currency in my brief case. It wasn't worth robbing me for, however."

Karen Davis, a health economist soon to be president of The Commonwealth Fund, a New York philanthropy, spoke of changes occurring in health programs out in the country while Washington broods over the subject .

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The price of treatment keeps going up. If payments to physicians are held down, she said, some physicians become less willing to take Medicare patients and/or they increase their charges to patients who can pay. So Medicare affects medical costs generally.

Coming at it from any angle, Davis said, "the price of health care is the heart of the problem. Some payers do get discounted prices through managed care plans. The rest pay more. . . . Don't we need a comprehensive approach?"

She speculated that the health-care system was reforming itself into a managed-care mode that should be somewhat cheaper than otherwise.

Meanwhile, Penner said, more expensive medical technology - "the pressure of incentives" - just cancels the savings and increases the bills.

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