Thompson, who did not participate in two debates held since he formally entered the race last month, said the U.S. economy was not headed for a recession and warned against strict trade restrictions on China during the debate with his eight Republican rivals.

But he was a bystander in an early confrontation between Giuliani, former mayor of New York, and Romney, the former Massachusetts governor, who continued their running campaign-trail battle over tax and spending policies while in office.

Giuliani, who leads Republicans in national opinion polls in the November 2008 presidential race, said he brought taxes down 17 percent in New York while Romney let them increase by 11 percent in Massachusetts.

"The point is, you've got to control taxes. But I did it. He didn't," Giuliani said.

Romney shot back: "It's baloney. Mayor, you've got to check your facts. I did not increase taxes in Massachusetts. I lowered taxes."

Thompson and the other Republicans criticized the explosion of federal spending in recent years and said rising budgets and deficits under President George W. Bush had to be tamed. Arizona Sen. John McCain pointed to his own Republican Party as the culprit.

A prominent Texas Republican has sued Rudy Giuliani’s law firm and a close friend and partner of Giuliani’s, Kenneth Caruso, alleging that Caruso, the firm and others "schemed and conspired to steal $10 million."

J. Virgil Waggoner, a Houston businessman and philanthropist, filed the in New York State Supreme Court in Manhattan in July. He alleges that Caruso, his former lawyer, conspired with Waggoner’s investment adviser to cover up the disappearance of $10 million Waggoner invested through a Caribbean bank, the British Trade & Commerce Bank.

Waggoner claims Caruso "may have also been romantically involved"with the investment adviser.

The Caribbean bank was shut down after its handling of Waggoner’s investment came to light, and its president was later jailed for money laundering.

Caruso, Bracewell & Giuliani, and Caruso’s two former firms — all named as defendants — have filed motions to dismiss the complaint on largely procedural grounds, and Caruso’s personal defense lawyer, Fred Warder, called it "meritless."

"It’s a pretty familiar tale of a deal gone bad and the principal trying to scapegoat his lawyers,"Warder said. "We expect it will go away on motions."

The Waggoner lawsuit is the latest messy allegation to hit Giuliani’s private businesses, which include the law firm and his consulting firm, Giuliani Partners, located five blocks from each other in Midtown Manhattan.

His former police commissioner, Bernard Kerik, left the consulting firm after his nomination to head the Department of Homeland Security collapsed amid questions about his personal ethics. Kerik was convicted and fined in 2006 for illegally accepting gifts and failing to report a personal loan while running the police department.

Giuliani and his firm have also faced protests for employing a Giuliani childhood friend and Catholic priest, Alan Placa, who was barred from priestly duties after being accused of molesting boys more than two decades ago. Placa has insisted the charges are false, and Giuliani has stoutly defended him.

Caruso, who joined Bracewell & Giuliani in 2005, was, like many of the former New York mayor’s tight inner circle, an assistant U.S. attorney when Giuliani was U.S. attorney for the Southern District in the Reagan administration.

Later, he worked on Giuliani’s mayoral campaigns. In Giuliani’s book, "Leadership," he describes Caruso as "a close friend"whose advice he sought when he was diagnosed with prostate cancer in 2000.

"Reid produced sufficient evidence that Google's (stated) reasons for terminating him were untrue or pretextual, and that Google acted with discriminatory motive such that a fact-finder would conclude Google engaged in age discrimination," Presiding Justice Conrad L. Rushing wrote.

The Mountain View-based search engine company has denied Reid's allegations but also refused to say why he was fired. In court documents, the company said Reid was fired when the program he managed was canceled.

Reid, a former associate electrical engineering professor at Stanford University, sued Google in July 2004, five months after he lost his job as its director of operations.

He alleged in his suit that his supervisors did not initially tell him why he was being fired. Director of Engineering Wayne Rosing, 55, eventually said he was not a good "cultural fit" at Google, where some colleagues referred to him as an "old guy" and "fuddy-duddy," Reid said.

Another supervisor, Urs Hoelzle allegedly said Reid, who is a diabetic, was too sluggish and "too old to matter" and his ideas were obsolete.

Reid is seeking back pay and punitive damages. He made $200,000 a year and lost stock options valued at millions of dollars when he lost his job.

Representative John R. Kuhl Jr. of New York received just his second telephone call ever from his state's Democratic governor, Eliot Spitzer, last week and was not surprised at the topic: children's health insurance.

"He said, 'I am calling you to come over to the dark side,' " said Mr. Kuhl, who was urged by the governor to drop his opposition to health care legislation and join the effort to override President Bush's veto of the bill.

Mr. Kuhl, a Republican who narrowly survived the Democratic sweep of 2006, said he was unlikely to budge. As a result, voters in his district will also be getting calls - from Democrats and advocacy groups who are planning a telephone, radio, television and even text-message barrage against Republicans over what is shaping up as a defining domestic policy issue of the 2008 campaign.

Democrats believe they have Republicans - short on campaign cash, contending with a spurt of retirements and quarreling - on the run over the legislation, the State Children's Health Insurance Program. Party leaders say the willingness of so many House Republicans to stick with Mr. Bush in the face of bipartisan backing for a $35 billion expansion of the program to provide insurance for poor children will prove costly as Election Day looms a year from now.

"They know they cannot sustain this vote in the fall of 2008 and they are praying it gets worked out before then," said Representative Rahm Emanuel of Illinois, chairman of the House Democratic Caucus.

The Health and Human Services secretary, Michael O. Leavitt, said Sunday that Mr. Bush was ready to work it out. "The president has already said, 'I want a compromise,' " Mr. Leavitt said on the ABC program "This Week." But Democrats say that they have already compromised with Senate Republicans and they are in no hurry to scale back the plan.

Republicans acknowledge they could suffer some short-term damage from an issue easily framed as either favoring health care for poor children - or not.

"Certainly in the immediate, superficial look, everybody is for covering kids who don't have health insurance," said Representative Adam H. Putnam of Florida, chairman of the House Republican Conference.

But he and other Republicans say they eventually can turn the issue to their advantage by making the case that Democrats are spending too much, taking a first step toward national health care and devoting tax money to coverage for some families who can afford insurance. They contend their stance could have special resonance with conservatives unhappy with the recent Republican reluctance to resist popular spending programs.

"If this was October of next year, I'd be really worried," said Representative Roy Blunt of Missouri, the second-ranking House Republican. "But this is October of this year and the beginning of us getting our credibility back by showing that we are willing to take principled stands on spending."

House Republican leaders are confident they can hold their forces together and sustain the president's veto in a vote scheduled for Oct. 18. But over the next two weeks, Mr. Kuhl and more than two dozen other Republicans will face an onslaught of advertisements and public activities intended to put pressure on them to vote to override it.

The Democratic Congressional Campaign Committee is taking on eight Republicans in competitive districts with a series of automated calls and radio advertisements that remind listeners that their lawmaker gets taxpayer-paid health care while opposing the expansion of the program administered by each state.

Beginning Monday, a coalition of liberal and labor groups will start a $1 million advertising effort, with a national advertisement to run on cable channels and local advertisements aimed at specific lawmakers. The national commercial shows a series of children beginning with a baby girl and states, "George Bush just vetoed Abby." It says Mr. Bush puts excessive war spending over health care at home.

"The president's 'yes men' in Congress need to stand up to Bush and stand up for families who work hard but simply can't afford insurance," said Brad Woodhouse, president of Americans United for Change, one group leading the effort.

The health care fight is coming at an inopportune moment for Congressional Republicans. In the Senate, a string of retirements has created openings for Democrats to increase their slim majority. House Republicans have had retirements of their own and party fund-raising is lagging behind Democrats by a wide margin.

The Republican targets of the advocacy campaign say they do not view it as much of a threat, saying many of their voters will not consider the advertisements credible and that tactics like robocalls can backfire.

"I don't worry about it," said Representative Steve Chabot of Ohio, who noted that he strongly supported the insurance program when it was created in 1997. "I am perfectly satisfied with my vote and there is a range of reasons why I think this is a bad bill."