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Budget Analysis Could Be a Problem for Democrats' SCHIP Plans

By Drew Armstrong, CQ Staff

August 15, 2008 -- House Democrats' hopes to force another vote on expanding a popular children's health insurance program may be stymied by a new cost estimate for the legislation.

According to an Aug. 12 score by the Congressional Budget Office provided to Congressional Quarterly, the latest version of the legislation (HR 3963) would increase deficit spending by $1.6 billion over five years—and therefore violate congressional pay-as-you-go budget rules.

House Democrats had considered forcing a September vote on the bill, as a political move to focus attention on Republicans who have repeatedly voted against Democratic proposals to expand the State Children's Health Insurance Program (SCHIP).

Bush twice vetoed bills late last year that would have expanded SCHIP spending by $35 billion—to about $50 billion over five years. The House twice failed to override him. Democrats say the additional funding is enough to cover about 10 million children.

According to the CBO, the expansion will now cost $37.4 billion over five years, compared with $34.9 billion for an earlier version (HR 976) based on a 2008 start date. The new, higher cost estimate can be blamed on the passage of time, more than anything.

In the budget calculations, 2008 would have been a relatively low-cost year, with expenditures increasing in future years. But the CBO now assumes the expansion would not begin until 2009—a more costly starting point that also translates into higher costs over the life of the legislation. And the bill's revenue-raising provisions would not provide enough money to offset that spending.

The new assessment leaves Democrats in a difficult position. For the bill to be compliant with pay-as-you-go rules, it would have to either cover fewer children or raise more revenue—perhaps by bumping up the tobacco tax increase that it already proposes.

But given how delicate the balance between coverage and costs was in the existing bill, such a move could cause problems.

Child advocates say SCHIP needs to cover at least 3 million more children than the 4.4 million it now serves each month.

"A vote in September that does not provide health coverage to 3–4 million additional kids is nothing more than a watered down version of last year's bill. We would not support that vote," said Christopher Spina, spokesman for First Focus. Spina's group has been pushing to expand the SCHIP program.

It was unclear if House Democrats still plan to hold a vote on the bill in September. Inquiries to the offices of Democratic leaders were not returned as of Friday afternoon.

Alex Wayne contributed to this story.

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