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Hidden Agendas, Not Kids, Dominate SCHIP Debate

In 2003, the Bush administration bulldozed a $400 billion program through Congress guaranteeing prescription drug coverage for seniors. It has been touting the achievement ever since, and justifiably so.

This year, however, President Bush is threatening to veto a $50 billion increase in the State Children’s Health Insurance Program. How come? [IMGCAP(1)]

The most obvious explanation — and one that explodes any vestiges of Bush’s claim to be a compassionate conservative — is this: Seniors vote, kids don’t.

Federal programs, chiefly Social Security and Medicare, see to it that the poverty rate among America’s 40 million seniors is less than 10 percent. Medicare guarantees seniors health insurance, at a five-year cost of $2.6 trillion.

At the same time, the poverty rate among America’s 74 million children is 18 percent and rising. About 8 million kids under age 18 lack health insurance, 11 percent of the total. According to a study this year by the Urban Institute and First Focus, a children’s advocacy group, federal spending on programs for children is one-third that for seniors.

The number of uninsured children would be 6 million greater were it not for SCHIP, the 10-year-old program that expires on Sept. 30 and is up for renewal by Congress this year. A battle royal is under way between Congress and the administration over the terms of renewal, and hidden agendas dominate the debate as much as concern for kids.

The administration wants to renew SCHIP and increase its funding by just $4.8 billion over five years — enough, it says, to cover about 800,000 children in families with incomes under 200 percent of the federal poverty level ($38,700 for a family of four) who are eligible for coverage but not enrolled.

But Democrats, children’s advocacy groups and many Republicans, citing Census Bureau and Congressional Budget Office data, say the number of uninsured children in working-poor families is actually about 6 million, that covering them would cost at least $50 billion and that the administration’s funding proposal would actually cause a decrease in coverage.

This week the administration served official notice that Bush will veto a bipartisan Senate bill pegged with a funding gimmick at $35 billion, but actually costing $50 billion, paid for with a tobacco tax hike and designed to cover 3.3 million kids.

At a White House event June 27, Bush said that “the Democrats’ proposal is part of a larger strategy. At the same time they try to expand SCHIP to older citizens, they are trying to expand Medicare to younger citizens. Their goal is to take incremental steps down the path to government-run health care for every American.”

Bush isn’t entirely wrong. Many Democrats — including Sen. Hillary Rodham Clinton (N.Y.) — do want to expand SCHIP to cover parents and to lift income caps to 400 percent of poverty, or $82,500 for a family of four. Others want to expand Medicare to cover 55-year-old early retirees.

But the Senate Finance bill sponsored by Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) and backed by Sen. Orrin Hatch (R-Utah) actually peels the program back from coverage of childless adults — allowed in some states through waivers granted by the Bush administration — and forces states to bear more of the cost of covering persons over 300 percent of poverty.

When the administration first started talking about a veto, Grassley and Hatch declared it “disappointing, even a little unbelievable” and said that failure to pass their compromise would allow Democrats to extend the program even more expensively.

If Democrats have a secret agenda beyond covering kids, so does the Bush administration. It wants to attach a wholesale reform of the nation’s health care financing system to SCHIP reauthorization.

Bush has proposed a grand idea — a $15,000 per family tax deduction that would enable the uninsured to buy health insurance while removing the tax code’s discrimination against those who are not covered by employer-paid policies.

As meritorious as the proposal is, Democrats aren’t buying it. It will be offered on the Senate floor when SCHIP is debated — and almost certainly lose. Then the Bush plan is to veto SCHIP and bargain for the tax change.

It’s a daring move that is likely to fail, primarily because Bush is an unpopular lame-duck president with no political traction and because his tax plan would move America away from employer-based health coverage — a huge policy shift that has not been adequately debated.

White House officials say that, even if that ploy fails, they can bargain after the veto for reduced funding for SCHIP. So $400 billion was fine for seniors, but $50 billion for kids is too much.

One other hidden agenda is at play in the debate. The American Federation of State, County and Municipal Employees is lobbying against “Express Lane,” a provision that would automatically enroll kids in SCHIP if they receive food stamps or low-cost lunches. AFSCME wants to expand union jobs, not protect poor kids.

It’s time to stop the games. It’s a scandal that 6 million low-income kids lack health insurance. Even if they don’t vote, they ought to have private coverage, just like seniors do for prescription drugs.

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