GOP Sees `Gimmicks' in Medicare, Tax Plan

Article excerpt

President Clinton continued to migrate toward the GOP yesterday, saying he is open to cutting the Medicare benefits of wealthy seniors and reducing capital gains taxes as part of a balanced-budget deal.

But Republican leaders responded more coolly than before to Mr. Clinton's overtures, saying they still fear his budget could be rife with gimmicks that will only appear to balance the books by 2002.

Mr. Clinton revealed his willingness to means-test Medicare benefits and accept a capital gains tax cut - one of the GOP's most cherished goals - in an interview with a New York TV station.

"I've never been philosophically opposed as some of my fellow Democrats are" to cutting the tax rate on profits realized from the sale of stocks, real estate and other assets, he said. Mr. Clinton is including a special capital gains break for homeowners in his budget, set to be released Feb. 6. He has supported a break aimed at small business in the past.

But he made it clear he would not accept a retroactive tax cut, and would insist that Republicans offset the revenue loss from any cut with reductions in spending or tax increases elsewhere in the budget.

On Medicare, Mr. Clinton said he would support raising premiums for wealthy seniors as part of a long-term restructuring of the program to prepare for the retirement of baby boomers. The president wants to set up a bipartisan commission to recommend such long-term adjustments in Medicare and Social Security.

Those premium increases would come on top of a 41 percent rise in premiums Mr. Clinton is expected to propose in his budget. The increases would apply to part B expenses, which includes physicians' care, lab tests, outpatient and mental health services.

Under the Clinton plan, to continue covering 25 percent of part B expenses, premiums would go up from $43.80 a month to $61. …