Setting the Record Straight: Democrats' SCHIP Bill Repackages Bad Policy

Senate Wastes Time With Partisan Political Statements Instead Of Passing A Bill To Cover Poor Kids First

"The Senate passed another SCHIP bill with major flaws, especially its failure to cover poor children first. Congress has known for weeks that the President would veto this bill. … Like the previous bill, this bill also shifts children with private insurance onto the government rolls, uses taxpayers' dollars to subsidize middle class families, and raises taxes. It does all this while costing even more over the next five years than the version the President previously vetoed."

- White House Press Secretary Dana Perino, 11/1/07

Sen. Charles Schumer (D-NY) says the White House seems to be "'moving the goal posts,' raising new objections as soon as Congress tried to address each of the president's concerns." (Robert Pear, "Expecting Presidential Veto, Senate Passes Child Health Measure," The New York Times, 11/2/07)

Democrats' SCHIP Bill Contains The Same Flaws As The Vetoed Legislation

Congressional Democrats refused to meet with Administration officials designated by the President to negotiate on an SCHIP bill that serves poor kids first. Instead, the House of Representatives made a few adjustments at the margins of the vetoed bill and passed it again.

Like the bill the President vetoed, the bill passed last night by the Senate:

• Allows States to avoid covering poor children first. The bill repeals the requirement that 95 percent of children below 200 percent of the Federal poverty level be covered before coverage is extended to new children from higher income families. The Democrats' new legislation also permits States to keep adults on the program through 2012.

• Raises taxes to move 2 million children covered by private health insurance onto government-run programs with fewer choices and longer lines. Federal revenues are at an all-time high, and no tax increase of any kind is needed to finance SCHIP reauthorization. The President's Budget offsets not only his proposed new SCHIP spending but also proposes an additional $92 billion in mandatory savings over five years.

• Uses taxpayers' dollars to subsidize middle class families. The Democrats' new legislation continues to cover children in families earning more than $62,000 per year (300 percent of the Federal poverty level). In addition, the legislation would not completely close the income disregard loophole, under which States could enroll children in families with income higher than $62,000 a year (for a family of four) by ignoring part of the family's income or expenses. The legislation fails to close the loophole for States expanding through Medicaid.

• Allows SCHIP to cover ineligible individuals. The legislation imposes no sanction if a person fraudulently attests to being a U.S. citizen. The bill contains an "express lane" enrollment provision that makes it easy for ineligible people to be enrolled in SCHIP, with virtually no penalty to States for letting ineligible people enroll. In fact, States may be rewarded through the Performance Bonus for adding ineligible people to the rolls.