By Alex Wayne, CQ Staff

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Legislation that would expand children's health insurance comes to the floor in both chambers this week in a far more partisan climate than either party expected.

Spurred by President Bush, who says he will veto an expansion of the State Children's Health Insurance Program (SCHIP) on the scale Democrats desire, Republicans are fighting the legislation every step of the way, especially in the House.

It didn't start out that way.

On Feb. 16, House Democratic Caucus Chairman Rahm Emanuel of Illinois was accompanied by two senior Republicans, Jim Ramstad of Minnesota and Ray LaHood of Illinois, as he held a news conference to announce a proposal to expand children's health insurance by $50 billion over the next five years. The renewal of SCHIP, it seemed, would be a bipartisan endeavor.

A little more than five months later, when the Ways and Means Committee approved its SCHIP bill (HR 3162) on July 27, Emanuel and Ramstad were on opposite sides of a straight party-line vote. The Energy and Commerce Committee, which also was expected to approve the bill last week, was blocked from voting by Republicans. The committee's chairman, John D. Dingell, D-Mich., ultimately gave up and left the bill to be discharged by a parliamentary tactic this week.

In the Senate, where a more modest SCHIP expansion is pending, supporters will have to win a cloture vote Monday just to bring the bill to the floor.

"I think it's politics 101," said Energy and Commerce Vice Chairwoman Diana DeGette, D-Colo. "I think the Republicans realize the reauthorization of SCHIP and providing health insurance to over 5 million more poor kids is going to be a big victory for Democrats, and they want to deny us that victory."

Emanuel said he expects Republican votes for the bill in the House, noting bipartisan support outside Congress: 43 governors have signed a letter supporting an expansion, and the House bill is backed by both the American Medical Association and the AARP, the interest group for the elderly, among other groups.

Republicans opposed to the bills say they have fought them because their spending is excessive and is offset by tax increases and cuts to Medicare. Some House Republicans also echo a Bush criticism that SCHIP's expansion is a step toward Democrats' ultimate goal of a system of socialized medicine - a theory Democrats have repeatedly dismissed.

"I supported the original intent of SCHIP to cover moderate-to-low-income children," said Energy and Commerce member Marsha Blackburn, R-Tenn, "but this bill has completely strayed from the original intent in a move toward a universal, government-run health care system."

Created in 1997, SCHIP was intended to insure children whose families are low-income but not poor enough to qualify for Medicaid. It is a partnership between states and the federal government that leaves states with flexibility to set eligibility and otherwise run the program as they see fit. Some states have expanded coverage under SCHIP to children whose families make more than three times the federal poverty level, or nearly $62,000 for a family of four; some use SCHIP to cover adults.

The government has spent about $40 billion over the last 10 years on the program.

A $15 Billion Difference

The House bill would expand SCHIP by nearly $50 billion over the next five years, to a total of $75 billion. It would also make changes to Medicare and Medicaid. The plan would bring more than 5 million children into SCHIP and Medicaid, Democrats say.

To help pay for the expansion, they would cut a Republican-championed program, Medicare Advantage, in which insurers provide benefits to seniors in place of the government.

While many Medicare Advantage plans are popular with seniors, the plans are paid about 12 percent more per beneficiary, on average, than traditional Medicare costs. The insurance industry warns that Medicare Advantage plans around the country would fold if the cuts are enacted.

The House bill would also raise tobacco taxes, including a 45-cent increase in the cigarette tax, to 84 cents per pack.

The Senate bill is less ambitious in its policy.

It would expand SCHIP by $35 billion over the next five years but does not include any of the Medicare and Medicaid changes in the House bill. The Senate bill would gradually push adults out of SCHIP and would cap eligibility for children at three times the poverty level, which are limits that are not in the House bill. Instead of cutting Medicare Advantage, the Senate bill relies on a larger tobacco tax increase, including a 61-cent increase in the cigarette tax, to $1 per pack.

The Senate bill, however, represents a carefully negotiated compromise between Democrats and Republicans on the Senate Finance Committee. Six of the panel's 10 Republicans voted to approve the bill, including ranking Republican Charles E. Grassley of Iowa. Grassley has warned that an expansion that exceeds $35 billion would lose his support, as well as that of other Senate Republicans.

The differences between the bills will ultimately have to be reconciled in a conference committee. House Democrats, who hope that their Senate counterparts will agree to a larger SCHIP expansion, are relying on an emotional appeal to make their case: "I don't think the senators are going to want to be seen as only covering 3 million of the 6 million additional kids that need insurance," DeGette said.

But Senate Democrats will argue that the House bill is too broad and expensive and is unpalatable to Senate Republicans. "As ambitious as their proposals are, I think that ultimately they're going to have to realize that the Senate did it the right way," said an aide to a Finance Committee Democrat.

Both bills face challenges before and after conference, however.

As written, the House bill is budget-busting: It violates the "pay-as-you-go" rules that Democratic leaders adopted at the beginning of the year, which require any new spending or tax cuts to be offset with spending cuts or revenue increases elsewhere in the government. A preliminary estimate by the Congressional Budget Office shows that spending in the bill would increase the budget deficit by $3.9 billion over its first five years and by $91.1 billion over 10 years.

House Democratic leaders must come up with ways to offset those deficits before bringing the bill up for debate or else risk losing votes from their conservative members. Aides said July 17 that they would but did not say how.

The bill is tentatively scheduled for debate in the House on Aug. 2.

In the Senate, the Finance Committee bill is expected to come under fire from both the right and left. Democratic Sen. John Kerry of Massachusetts is expected to offer an amendment that would increase the SCHIP expansion to $50 billion over five years. That will force Democratic leaders to persuade their members to vote against Kerry's amendment, even though they may favor it, in order to maintain enough Republican support to break filibusters against the bill.

Senate GOP leaders are expected to offer an alternative SCHIP renewal as a substitute for the Finance Committee bill. The Republican bill, by Minority Leader Mitch McConnell, R-Ky., would limit eligibility for SCHIP to 200 percent of the poverty level or 50 percentage points above states' Medicaid eligibility levels in 1997, the year before SCHIP began.

McConnell called his bill a reauthorization of SCHIP, not an expansion, which he said he opposes.

Finally, Bush has threatened to veto either the House Democratic bill or the Finance Committee bill. If he does - and DeGette, for one, is skeptical that he would follow through with the threat - it is not clear that there is enough support in either chamber to override a veto.

The Senate is scheduled to vote on a motion to invoke cloture, thus limiting debate on a motion to proceed to a shell House-passed tax measure (HR 976) that will be stripped of its contents and used to carry the SCHIP provisions of S 1893. A vote is scheduled for 5:30 p.m. Monday.

Source: CQ Today
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