Republicans in US deficit challenge

Washington - House and Senate Republican leaders have agreed a seven-year plan to balance the US budget, including sharp reductions in health programmes and larger than expected tax cuts - thus moving a big step closer to a confrontation with President Clinton, writes Rupert Cornwell.

The proposal unveiled by Senate majority leader Bob Dole and the Speaker, Newt Gingrich, will form the basis of the budget which will be approved by both chambers before 4 July. Mr Clinton must now either make concessions or veto the spending cuts.