Sustaining the SCHIP Veto

The fight in Washington over the State Children’s Health Insurance Program (SCHIP) is a classic example of the old adage, “No good deed goes unpunished.” Combine it with the Washington truism that, given the opportunity, Congress will mess up even the best program. This is the current state of affairs for our efforts to help needy children obtain proper healthcare.

How We Got Here

In the wake of President Bush’s veto, it’s important to look at how we reached this point.

A Republican Congress enacted the SCHIP program in 1997. I was the Senate’s majority leader then. SCHIP was intended to bridge the healthcare gap between truly poor children who qualified for Medicaid and those from working families who could obtain healthcare insurance through their parents’ employers. Our concern then as now was for the working poor. By definition, SCHIP was focused on those children whose parents couldn’t afford to purchase insurance individually and whose employers did not provide a family health insurance benefit.

As the current Congress approached the new fiscal year, the issue grew into a crisis. Instead of re-authorizing SCHIP with a funding increase to include those children eligible under the intended criteria, the Democratic majority in Congress proposed a broad expansion of SCHIP to include hundreds of thousands of adults as well as upper-income children already covered under private insurance. The price tag is more than double the current program—$35 billion for the expansion alone. In some states, families earning up to $83,000 a year would be eligible for this “low-income program.”

Democrats’ Goal

The tenor of the debate explains why this Congress garners only an 11% approval rating from the American people. Those members trying to live within our budget and opposed to adding adults and upper middle class children to SCHIP have been branded as kid haters. There appears to be no room in the debate for adhering to SCHIP’s mandate and ensuring that every child who qualifies will be protected. The goal appears to be to expand this entitlement program into a precursor of universal, government-mandated healthcare.

Democrats advocating this expansion point to the Bush Administration’s own waivers over the years to too many states to increase the SCHIP income cap. That’s part of the problem, but it shouldn’t be a roadmap for exploding the growth of a good program.

How do Democrats plan to pay for this massive funding increase? By raising your taxes, of course, starting with a 61-cent-a-pack tobacco tax. Some contend that when you increase tobacco taxes, tobacco use drops. Common sense, often missing from Washington debates, says we can’t have it both ways. If we tax people out of smoking, then we’re taxing children off SCHIP.

According to the non-partisan Congressional Budget Office, a tobacco tax is “the most regressive” and will hit the poor and working class harder than most, the very people whose children SCHIP was intended to help.

Then there’s the slight of hand: CBO says Democrats hide about $40 billion in unpaid costs in their expansion through budget gimmicks. After five years, Congress will be forced to raise taxes further or drop millions of children off the SCHIP rolls in 2013.

The problems aren’t just limited to funding issues. This massive increase voids a sound rule requiring states to enroll 95% of eligible children in SCHIP before allowing adults on the program.

Identification regulations are also relaxed for legal and illegal immigrants to sign up for SCHIP.

SCHIP and Medicaid combined already cover the same number of Americans living at or below 200% of poverty. The problem isn’t that SCHIP needs to reach more people. It needs to reach the right people.

GOP Alternative

The Republican alternative to the SCHIP reauthorization was simple and focused on children who otherwise would have no health insurance. Our alternative was an $8 billion a year, or 33%, increase in the current program. A 33% increase in a program as large as SCHIP is hardly anti-kid.

Our alternative would have prevented “crowd-out,” where families drop their pre-existing, private insurance policies to sign up for an entitlement. Every dollar going to cover a middle-income adult is a dollar taken away from the very child SCHIP was intended to help.

To this, Democrats accuse Republicans of refusing to help children. That’s the height of political demagogy.

Congress is unanimous in its commitment to increase the SCHIP program by an appropriate amount that will preserve its benefits for those now on it and cover those eligible children not yet getting its help. What divides the Congress is the attempt by some to transform SCHIP into an expensive precursor of universal, government-mandated health care. Clearly there are grounds for a compromise that protects our children and at the same time keeps faith with the American taxpayers.