Bush Using SCHIP Reauthorization Debate To Push Tax Revisions

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State Children's Health Insurance Program

Sen. Chuck Grassley (R-Iowa) on Monday said that President Bush isthreatening to veto the SCHIP compromise bill in order to forcerevisions to the tax code that would provide deductions to individualswho purchase private insurance, the Washington Postreports. Grassley said -- and White House aides agreed -- that Bush'sopposition to SCHIP does not result from the cost of the bill butrather from larger health policy issues, according to the Post (Weisman/Lee, Washington Post, 9/25). '

Thecompromise bill, which resembles the Senate version of SCHIPlegislation, would provide an additional $35 billion in funding overthe next five years and bring total spending on the program to $60billion. The additional funding would be paid for by a 61-cent-per-packincrease in the tobacco tax, as proposed in the Senate version. Thecompromise legislation does not include revisions to Medicare. TheHouse could vote on the measure as early as Tuesday, with the Senateexpected to vote on the measure later this week (Kaiser Daily Health Policy Report, 9/24).

Grassleysaid that Bush's desire to pass the tax revisions is commendable butthat the revisions can no longer feasibly be linked to SCHIP. Grassley,speaking of a conversation with Bush on Thursday, said that Bush "has agoal that I share, that we need to take care of the uninsured throughprivate health insurance," but "you can't put that on this bill."Grassley said he was surprised to hear Bush discuss larger health careissues during the conversation because Grassley had discussed linkingan SCHIP extension with larger health care reform in the spring with HHS Secretary Mike Leavitt, White House National Economic Council Director Al Hubbard and Hubbard's deputy, Keith Hennessey.

Grassleyendorsed the approach and encouraged the administration to garnerDemocratic support. However, when the White House made no effort to doso, Grassley in April decided that the SCHIP reauthorization wouldproceed without larger reforms (Washington Post, 9/25).

Additional Comments

Grassley on Monday said he has not considered negotiating with Bush.Grassley said, "I'm concentrating on getting this passed, and hopefullythe president wakes up and realizes it does everything he said hewanted to do" (Johnson/Bourge, CongressDaily, 9/25).Grassley said that if he were a Democrat, he would send areauthorization bill to the president every three months, along withcampaign advertisements to Republicans that accuse them of abandoningchildren.

Under this plan, pressure would grow for Bush to either sign the bill or for Republicans to override his veto (Washington Post,9/25). Democratic Caucus Chair Rahm Emanuel (D-Ill.) in a statementsaid, "For this president who helped rack up $3 trillion in new debt,it is not about the spending, it is about priorities, and the presidenthas made his clear" (Russell Chaddock, Christian Science Monitor, 9/25).

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White House Response

Administration officials said they were "concerned that the White Housewas being hurt by televised news reports that portrayed the fight as astruggle between ... Bush and poor children, rather than aphilosophical debate over the role of government in health care," the New York Times reports (Pear/Hulse, New York Times,9/25). White House spokesperson Tony Fratto said that the SCHIP bill is"bad policy," adding, "Why should we go along with bad policy if we'vegot something better?" Fratto continued, "It is a bigger issue. There'sno question it is," adding, "It's not a question of fiscal prudence.It's a question of appropriate policy" (Washington Post, 9/25).

Democratic Votes

Meanwhile, both Democrats and Republicans "appear to be having problemscorralling votes to support their position," according to CongressDaily.A senior Democratic aide said, "It's kind of heavy lifting going intothis right now," adding, "There is a bit of unrest." Democrats haveencountered resistance to the compromise bill from some centrist BlueDogs, a group of Democrats that supports fiscal responsibility, and theCongressional Black Caucus -- "many in rural tobacco-growing districts" -- who are upset about the tax increase, CongressDaily reports.

CBC members have complained that the bill does not provide coverage to enough needy children. Meanwhile, the Congressional Hispanic Caucus members are unhappy that the bill does not extend coverage to documented immigrants. According to CongressDaily, "Democratic defections are expected, but enough Caucus members are expected to capitulate to ensure approval."

Republican Votes

Republicans hope to unify opposition to the bill by "pointing to whatthey say is flawed logic in using a tobacco tax increase to fundSCHIP," CongressDaily reports (CongressDaily,9/25). Reps. Joe Barton (R-Texas) and Nathan Deal (R-Ga.) in a letterto colleagues said that under the bill, "the poorest Americans will beburdened with even higher federal taxes so that wealthier families andbusinesses can shift the cost of their health care coverage to theAmerican taxpayers." Republicans also say that the legislationimproperly appropriates funds, assuming a lower spending level for theprogram after 2012, which means that Congress will need to allotadditional revenue to fund the program after that date or cutenrollment, according to the AP/San Jose Mercury News.

Inaddition, Republican leaders have assured House Republicans concernedabout voting against a children's health bill that they will getanother opportunity to vote for SCHIP legislation. "Everybody getsanother chance. At the end of the day, you're going to get to vote forSCHIP," a Republican aide said (CongressDaily, 9/25).

Republicanofficials said the White House has suggested that Bush "will eventuallyagree to increase the program by more than $5 billion" over five years,the funding level Bush supports, "in hopes of softening the blow tolawmakers who support his veto," the AP/Arizona Daily Starreports. House Minority Leader John Boehner (R-Ohio) in a statement onMonday said that Republicans support a modest SCHIP expansion, "butthey have warned a huge expansion of massive government-run health carewould lead to a system of 'Hillarycare' that puts government ratherthan doctors and patients first" (AP/Arizona Daily Star, 9/25).

LaHood Letter
In related news, Reps. Ray LaHood (R-Ill.) and Heather Wilson (R-N.M.)on Monday sent a letter to House Republicans asking them to support thecompromise bill. According to the letter, "A bipartisan group of Senateand House members have crafted this agreement. While not perfect, thisagreement retains the core principles of SCHIP when it was enacted andprovides states with new tools to enroll more eligible low-incomechildren" (CongressDaily, 9/25). The letter continues, "Federal assistance is reduced if states expand coverage to middle-income children" (AP/Arizona Daily Star,9/25). LaHood also has worked with Emanuel to enlist moderateRepublicans to support the compromise bill and is hoping to gain 30Republican votes to approve it. However, many Republicans "are unlikelyto show their cards until the end of the vote," according to CongressDaily (CongressDaily, 9/25).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, afree service of The Henry J. Kaiser Family Foundation.

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