By Alex Wayne, CQ Staff

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The chief Republican architects of a deal to expand a children's health insurance program are defending the proposal against criticism by President Bush, who has threatened to "resist" it.

This week, members of the Senate Finance Committee tentatively agreed on a renewal and expansion of the State Children's Health Insurance Program (SCHIP), which covers about 6 million children from families that are low-income but not poor enough to qualify for Medicaid.

Bush sees the legislation as a backdoor move toward government-run health care, but committee Republicans Charles E. Grassley of Iowa, Orrin G. Hatch of Utah and Pat Roberts of Kansas said in a July 11 letter to Bush that the issue that most concerns him - the use of SCHIP to cover adults - is partly his fault. Under Bush's watch, the department of Health and Human Services has approved 12 waivers to states allowing SCHIP coverage of adults, records show, including a waiver issued May 24 allowing Wisconsin to cover parents earning up to twice the poverty level.

Expanding the program, which expires Sept. 30, is a top priority for Democrats, although the deal the Finance Committee has struck would not expand it as much as some would like.

The bill, which Finance Chairman Max Baucus, D-Mont., will release Friday, would increase spending for SCHIP to $60 billion over the next five years, $35 billion more than if it were extended in its current form but still $15 billion less than called for in the congressional budget resolution (S Con Res 21). The extra spending would be financed with increased tobacco taxes, chiefly a 61-cent boost in the cigarette tax, to $1 per pack.

But Bush sees in the deal a strategy by Democrats to gradually enact a system of government-run medicine. Several states have received waivers from the government, including during Bush's term, allowing them to use SCHIP to cover adults as well as children and to expand coverage to middle-income families. Bush fears that if Congress increases spending on SCHIP and continues to allow states to expand the program's coverage, families will abandon private insurance - or be forced out as employers drop their health plans.

"[T]he program is going beyond the initial intent of helping poor children," Bush said in a speech July 10. "It's now aiming at encouraging more people to get on government health care."

Bush did not specifically say he would veto the Finance Committee's deal on SCHIP renewal but said, "I'll resist Congress' attempt to federalize medicine." Members of the committee, though, say administration officials have threatened a veto. The White House press office did not return a phone message Thursday.

"The fact that the department has approved these waivers in the past and has continued to extend them has complicated the reauthorization of the SCHIP program," the lawmakers told Bush.

And in a statement Thursday, Grassley and Hatch said it was "a little unbelievable" that Bush would threaten to veto the Finance Committee's deal "because it isn't even finalized yet."

Trying to 'Refocus the Program'

Grassley and Hatch, who said they oppose expanding the program as much as Democrats would like, gave examples of proposals they have quashed in committee negotiations. The deal would not allow SCHIP to be expanded to cover more adults, they said, although they did not say what would happen to the more than 600,000 adults already covered by the program. It also would not allow SCHIP to cover legal immigrants, a standard provision in every SCHIP reauthorization bill Democrats have introduced (HR 1535, HR 2147, S 895, S 1224, S 1364).

"Our goal is to refocus the program on low-income children," Hatch and Grassley said. "What the administration needs to understand is that if a bipartisan plan isn't achieved, then the Democratic-controlled Congress will, at the very least, extend the current program with all the terrible policy provisions that have evolved, such as waivers for childless adults and coverage for higher-income kids."

Further, the lawmakers warned that Bush's preferred policy of tax breaks for middle-income families to help them buy health insurance isn't going anywhere. "[It's] not realistic, given the lack of bipartisan support for the president's plan, to think that can be accomplished by next week or even before the current children's health care program runs out in September," they said.

However the Senate SCHIP renewal evolves, it is likely to be more palatable than the House version to Bush. Rep. Diana DeGette, D-Colo., vice chairwoman of the Energy and Commerce Committee, which has jurisdiction over SCHIP, said Thursday that House Democrats are still planning a $50 billion expansion that would allow continued coverage of adults.

"If the president wants to veto an expansion of a program - that his own administration has supported - which provides health care for low-income kids, I think that's just a terrible misjudgment," she said.

Source: CQ Today
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