U.S. House Defeats Effort to Override SCHIP Veto

Published December 1, 2007

On October 18, the U.S. House of Representatives defeated an effort to override President George W. Bush’s veto of H.R. 976, the Children’s Health Insurance Program Reauthorization Act of 2007.

The vote was 273-156, falling 13 votes short of the two-thirds majority required to override the veto.

Veto Opposed, Praised

Bush vetoed the reauthorization measure on October 3, only his fourth veto in seven years in office. The current program, which expired in September, was extended until mid-November, allowing “time for a better bipartisan solution,” said U.S. Rep. Roscoe Bartlett (R-MD) in an October 18 statement.

On October 1, the Service Employees International Union (SEIU) held a rally in front of the White House featuring 25 children pulling red Radio Flyer wagons full of petitions urging the president not to veto H.R. 976. The children held huge signs with the word “veto” crossed out. The White House did not accept the petitions.

H.R. 976 would have renamed the “State Children’s Health Insurance Program” (SCHIP) the “Children’s Health Insurance Program”–a move critics say indicates a desire to increase government control over the health care system. In Bush’s veto message to the U.S. House of Representatives, he noted, “Our goal should be to move children who have no insurance to private coverage, not to move children who already have private health insurance to government coverage.”

Robert Helms, a resident scholar at the American Enterprise Institute, said the expansion bill “costs too much” and “the extra dollars are used in a wasteful way to expand coverage to children from higher-income families, many of whom already have private coverage.” Business groups opposed the bill because of this phenomenon, referred to as “crowd-out,” a situation brought about when government programs provide coverage to individuals who would otherwise have been covered by employer-sponsored plans.

Wealthy Households Included

SCHIP was originally designed to insure children in families that could not afford health insurance but made too much money to be eligible for other government programs such as Medicaid. SCHIP allows children from families that make up to 200 percent of the federal poverty level (FPL) to enroll.

Under the proposed legislation, states would have been strongly urged to enroll children from families that make up to 300 percent of the FPL, and able to enroll children in some households that make up to 400 percent of the FPL–or about $83,000 annually.

The new bill would have expanded SCHIP by $35 billion, bringing the program’s budget up to $60 billion over the next five years. The increase would have been paid for by a new 61 cent per pack increase in cigarette taxes.

Tax Hike Vetoed

Many experts questioned the bill’s funding mechanism and praised Bush for vetoing it.

“The president was justified in vetoing the SCHIP expansion,” said Devon M. Herrick, Ph.D., a health policy expert at the National Center for Policy Analysis in Dallas. “Research suggests 50 to 60 percent of newly eligible enrollees would have dropped private coverage to take up free coverage, and it would do almost nothing to enroll the uninsured kids that are already eligible for SCHIP or Medicaid.

“Rather than expand public entitlements, we should be using this opportunity to look for ways to expand private coverage,” Herrick concluded.

Ryan Ellis, tax policy director of Americans for Tax Reform, agreed.

“People have forgotten that the president, in vetoing this HillaryCare 2.0 bill, has also vetoed the first tax increase to come to his desk,” Ellis said. “He deserves credit for vetoing the hike in the cigarette tax.”

Political Football

In the meantime, Bush signed a continuing resolution (CR) to keep SCHIP running at pre-vote funding levels through November 15. Because they knew the CR was inevitable, House and Senate leaders passed a bill they knew would be vetoed in order to force Republicans who oppose the massive expansion to vote against a children’s health care bill.

This will surely become a 2008 election issue, with advertisements declaring Republicans voted against such a measure and the president vetoed it. In the previous six-and-a-half years of his presidency, Bush vetoed only three pieces of legislation–two concerning stem cell research, and an appropriations bill that included a timeline for withdrawal from Iraq.

James Gelfand ([email protected]) is a health policy expert in Washington, DC.

For more information …

“SCHIP: Crafting a Better Compromise to Cover Kids,” by Nina Owcharenko and Stuart M. Butler, Ph.D., WebMemo #1635, Heritage Foundation, September 24, 2007: http://www.heritage.org/Research/HealthCare/wm1635.cfm