WHERE IT MAY REALLY HURT

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Such cascading budget crises spell big political trouble in the next few years for the 31 Republican Governors. They have thus far kept mum about their anxieties, afraid that going public would stall their party's momentum in Washington. That can't last. Rising G.O.P. star Christine Whitman of New Jersey, up for re-election in 1997, could be the first to face the consequences. She says she supports the block-grant approach "philosophically" but wants "a glide path that's doable," not the downshift Gingrich has in store, which would take New Jersey from 10% growth to 2% in just 11 months.

Some Medicaid savings are necessary and achievable. From state to state, there's a huge disparity in federal Medicaid spending. New York and Washington, for example, collect an average of $2,000 per poor person, while in Idaho and Kansas it's about $500. With that much federal money running through the system, some states have helped create an overgrown health-care industry and health-care bureaucracy, both of which could stand some pruning. Other states have whole departments devoted to scamming more Medicaid money from the Federal Government. And when it comes to services, some optional benefits, like adult dental care or eyeglasses, might be trimmed on the theory that the poor shouldn't be entitled to a better benefit package than many middle-class people enjoy.

The Medicaid debate may come down to two choices. The two parties can remove the need for Medicaid savings this deep by dropping their tax cuts or putting back into the negotiations the half of the budget they've taken off the table: defense and Social Security and other entitlements for the well off. The alternative is to fix Medicaid later. In effect, that's Plan B for antsy Republican Governors, who pray that if the President doesn't save them by scaling back the cuts, there will be time to revisit the issues before disaster strikes. Maybe they'll get lucky. But judging by experiences in Arizona and Tennessee, two states that went early down the road to Medicaid reform, Governors had better learn to thrive on chaos--and learn fast.