Mr. Pataki has said he would support a takeover only if the state can pay for it in Medicaid savings - a highly unlikely prospect.

The budget calls for $60 billion in Medicaid savings over 10 years and gives states new power to reduce or reconfigure benefits for millions of low-income people.

Mr. Bush proposed $13 billion in Medicaid savings over five years.

The House version of the budget envisioned Medicaid savings of $15 billion to $20 billion.

The Federal Government would have paid for 56 percent of the costs through Medicaid savings, with the rest coming from the state, the participants and voluntary employer contributions.

In addition, it is estimated that every dollar spent on WIC results in between $1.77 and $3.13 in Medicaid savings for newborns and their mothers.

For his part, Mr. Clinton proposed Medicaid savings of $52 billion on Saturday, up from the $37.5 billion he had previously sought.

Michael Marr, a Pataki administration spokesman, said Medicaid savings enacted Tuesday would cover the cost of the cap to the state next year: $121 million.

But it has become increasingly clear that many of those welfare and Medicaid savings will not materialize.

In fact, some analysts said Mr. Giuliani would have to use every cost-cutting option imaginable to achieve his goal of nearly $1 billion in Medicaid savings.