If that limit is breached, the balanced-budget law requires automatic spending cuts in military and domestic programs to meet the target.

And Ms. Shalala said the new balanced-budget law would "help control spending even more."

The cuts were required by the balanced-budget law because Congress failed to approve its own deficit reduction plan before the deadline.

To nearly everyone's surprise the states and cities found ways to sustain their spending anyway, despite balanced-budget laws that require them to keep spending in line with revenue.

This leaves a deficit of $92.5 billion - well under the $100 billion goal of Congress's balanced-budget law for 1990.

He said the squeeze on payments under the 1997 balanced-budget law was already causing "real harm to real people."

It is also the date that some $85 billion in automatic spending cuts required by the balanced-budget law will take effect unless lawmakers can agree on their own budget.

Mr. Synar gained national attention two years ago with his successful lawsuit to force changes in the balanced-budget law.

But the back-breaking straw, hospital chiefs say, came with Medicare cuts, enacted under the 1997 balanced-budget law, that will cut more each year through 2002.

It sticks close to the tight limits set by last year's balanced-budget law and this year's Republican-controlled Congress.