MISSOURI COMMENTARY: BUDGET SHIFTS TO MICRO FROM MACRO

The 1994 election has been declared to be something akin to 1932 -- a "defining" or a "realigning" election that causes a seismic and permanent change int he political landscape from something tried but tired to something new. Time will tell.

If, indeed, there is a decisive shift in public attitudes, it will find itself reflected more in budget priorities than in any other facet of Speaker Newt Gingrich's platform.

Recall that Ronald Reagan didn't curtail federal spending. Indeed, he accelerated it with massive increases in the defense budget. Reaganomics was a program to cut federal revenues by lowering taxes. Reagan implemented a strategy of continuous budget deficits large enough to force the elimination of federal programs no longer sustainable in an expanding sea of red ink.

Senator Pat Moynihan was perhaps the first to perceive the consequences of the Reagan revolution. Many others in Congress sat passively, wanting to believe the myth of the Laffer Curve that lower taxes would in time generate higher revenues sufficient to sustain ever-increasing levels of spending -- especially on the military.

When Bill Clinton assumed the presidency, he realized that the galloping budget couldn't be endured forever. He made deficit reduction his first priority and, with zero Republican support, made enough progress to satisfy the Federal Reserve, Wall Street and most of our nation's economists. That was last year.

Now it's the Republicans' turn to staunch the flow of red ink. This time with little Democratic support. the easier cuts have already been made by Clinton. The tough ones await action. Congressional budget resolutions speak in broad parameters. Now various committees have to do the dirty work of translating generalities into specifics. The devil is in these details.

In the wake of the 1994 election, the pundits concluded "people want change" or "people want government reduced" or "people want government to spend less." Legitimate conclusions. But where do the people want spending cut? Do veterans want less spending for veterans? Do farmers want less spending for farmers? Do arts enthusiasts want less spent on the arts or PBS? Do teachers and universities want less spent on education and research? Do the parents of disadvantaged children want less money for their children's school lunch? Do nutritionists less money for nutrition? Do mayors want less money for their cities? Do people fearful of crime want less money for law enforcement? Do environmentalists want cuts in environmental funding?

The great battle will be over Medicare and Medicaid. Health care is where the big money is and where the huge anticipated budgetary increases will occur. Medicare costs are escalating by 10 percent a year. Unless modified, Medicare will grown from this year's $176 billion to $500 billion 10 years from now. The elderly population is expanding, people are living longer and the costs of health care for the elderly ever escalates. President and Mrs. Clinton touched on this last year and said that in order to move to a balanced budget, Medicare had to be dealt with as part of an overall reform of a national health delivery system. the massive Clinton proposal flopped massively. Yet the growing fiscal problems of Medicare remained.

Medicare is a "fee for service" system -- the most expensive form of health-care delivery. The average Medicare male will put in $25,000 and receive $75,000 in benefits. The average Medicare female, living longer, will receive $100,000 in benefits.

Congress is faced with a choice of nasty solutions: pump in more money, charge beneficiaries more, pay hospitals and doctors less or reduce coverage. Senator Pete Domenici, the shrewd Chairman of the Senate Budget Committee, pretends he doesn't know how to make the Medicare cuts. he resorts to the oldest Washington cop out: appoint a "blue ribbon commission" and let the commission tell Congress what to do.

House Budget Chairman John Kasich is more outspoken in what he would do with Medicare. He would put the elderly into managed care programs which are growing enormously in the private sector. Trouble is most managed care programs aren't anxious to load up on lots of retirees with their escalating use of health services. Something has to give because a fee-for-service program for the elderly is not fiscally sustainable over the long haul.

The Republicans will carry the day on their overall budget resolutions. Then will come the individual battles on the dicey specifics of the budget reductions. The ultimate decision will rest with President Clinton and his right to veto. Does he want to veto appropriation bill after appropriation bill claiming that the cuts contained therein were too drastic? Does the budget cutter of 1994 now want to cast himself as the big spender of 1995?

~Tom Eagleton is a former U.S. senator from Missouri and a columnist for the Pulitzer Publishing Co.