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Bleak Prospects for Children's Health Bill

September 19, 2007 - by Donny Shaw

A few weeks ago it seemed possible that a bill to reauthorize the State Children’s Health Insurance Program (SCHIP) would be the impetus for the first veto override of George Bush’s presidency. But, under pressure from the Tobacco and Health Insurance industries, many lawmakers have backed away from crucial provisions of the bill, forcing congressional negotiators to settle on a version of it that lawmakers are much less excited about. Insider news source CongressDaily($) reports this afternoon:

>Democratic House members and aides say they are not yet certain that they have the votes to pass the smaller SCHIP bill, in part because it does not include Medicare changes that attracted Democratic votes in July. Several tobacco-state Democrats are expected to drop off because the Senate bill includes a 61-cent per-pack increase in the cigarette tax. But moderate House members and aides say President Bush’s veto threat is helping the Democrats’ whip effort because it gives wavering Caucus members assurances that the proposal will not become law. Those sources also predict that SCHIP funding will be given a one-year continuing resolution after the president vetoes the bill.

SCHIP was created in 1997. It’s purpose is to provide healthcare to children whose families can’t afford private insurance, but aren’t poor enough to be covered by Medicaid.

The SCHIP reauthorization bill that the House originally passed contained a provision that would role back payments made to private insurers under the Medicare Advantage program. And while the bill’s proposed increase in overall funding for SCHIP had bipartisan support, Republican support for the Medicare provision was virtually non-existent. The powerful health insurance industry opposed this provision because it would have reduced their payments to a level equal with the public Medicare plan, their competition. In need of Republican support, the Democratic leadership decided to drop the House bill and pick up the Senate’s bill instead.

The Senate’s bill proposes reauthorizing SCHIP at a lower level than the House bill, but it would still expand the program considerably from where it stands now. And to the relief of Republicans, It does not contain a Medicare reform provision. The problem with the Senate plan, however, is in how it proposes to pay itself back. The bill would increase the tobacco tax by by 61 cents per pack, raising the current level of 39 cents per pack to an even dollar.

Because of a new hardline budgeting rule that Congress adopted when the Democrats took over in January, scrapping the unpopular revenue-increasing tobacco tax while retaining the spending increase is not an option. The new rule, know as PAYGO, stipulates that any increase in spending for an entitlement program (such as the proposed SCHIP expansion), must be offset by an equal gain in surplus elsewhere. It’s a plan to ensure that the congressional budget remains deficit neutral — discretionary spending excluded.

If the Democrats’ attempts to reauthorize and expand SCHIP are defeated, the defeat will be semi-sweetened by a sense of fiscal righteousness. They will have remained true to their principles despite being challenged by a partisan clash over policy. And if they continue the funding level for the program with a year-long continuing resolution as CongressDaily’s sources suggest — and if 2008 brings a Democratic President and a stronger Democratic majority to Congress — implementing a SCHIP expansion, Medicare reform, and a modest tobacco tax increase to pay for it should be a breeze.

Here are some new SCHIP-realted links ::

A new Urban Institute study: How Will Low-Income Kids Benefit under House and Senate Bills?

AMA disappointed Medicare cuts not to be addressed in SCHIP agreement; calls on Senate to act

The Hill: Absence of Medicare provisions in SCHIP bill changes the stakes

SEIU Members and Kids to Congress: Money for Healthcare, Not War!

OpenSecrets.org’s campaign contribution information for the Health industry and the Tobacco Industry.

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