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House Passes Expansion of Children's Health Program

By Drew Armstrong, CQ Staff

JANUARY 14, 2009 -- The House sent the Senate a reauthorization of the State Children's Health Insurance Program on Wednesday, setting up what Democrats expect to be an early legislative victory for their party and President-elect Barack Obama.

"This is a day of triumph for America's children," said House Speaker Nancy Pelosi, D-Calif.

It was also a day of triumph for congressional Democrats. Reauthorizing and expanding the State Children's Health Insurance Program (SCHIP) has been one of their top goals since they took control of the House and Senate after the 2006 midterm elections.

Twice, the 110th Congress sent SCHIP legislation to President Bush, and twice it fell victim to his veto. This time, a far different reception awaits the legislation (HR 2), which the House passed by 289-139.

Obama has strongly supported the program's expansion and is eager to sign the reauthorization.

The bill would reauthorize SCHIP for four-and-a-half years and allow $34.3 billion in new spending over five years, according to a Congressional Budget Office analysis.

The bill would allow states to cover children and families with income up to 300 percent of the poverty level. Democrats say it will permit enrollment of 4 million additional children and adults in the program, growing SCHIP to cover 11 million people.

Other provisions in the bill, including a state option to cover legal immigrants who have been in the country for less than five years, boost the cost of the legislation to $39.4 billion. That total cost would be offset with $40.1 billion in revenue increases and savings over five years, mostly through a 61-cents-per-pack increase in the federal excise tax on cigarettes.

The Senate Finance Committee plans to mark up its own, slightly different version Thursday, with floor action likely as early as next week.

Familiar Arguments

Many of the House floor arguments had a decidedly familiar ring, reprising those offered in 2007.

House Majority Leader Steny H. Hoyer, D-Md., said Democrats were acting on the mandate voters gave them and Obama in November. "This bill is going to reflect their desire for and vote for change," Hoyer said.

"It is essentially the same bill that we passed in the last Congress. . . . The only thing that stood in the way was President Bush's veto," said Rep. Frank Pallone Jr., D-N.J.

Republicans argued that the program should focus on insuring the poorest children first, before expanding to cover youngsters in families with somewhat higher income levels.

"We must pass legislation that first reaches those who are the most in need of assistance, those whose family incomes are between 100 percent and 200 percent of the poverty level, the original intent of the bill," said Rep. Phil Gingrey, R-Ga.

The House rejected, 179-247, a GOP motion to recommit that would have amended the bill to require states to insure 90 percent of children under 200 percent of the poverty level before allowing coverage for families with higher income levels. The motion also sought stricter controls on coverage for immigrants.

"We outlined our principles for reauthorization. The principles are nothing new," said House Minority Leader John A. Boehner, R-Ohio.

Republicans called the cigarette tax regressive, saying it amounted to a tax on the poor. They also warned that the higher tobacco taxes would eventually undermine the program's funding.

"The percentage of Americans who smoke has been dropping for decades," said Rep. Dave Camp of Michigan, the ranking Republican on the House Ways and Means Committee. "Less smoking will lead to less taxes being collected. Less taxes being collected will lead to less and less money ... to pay for an expansion of SCHIP."

Florida Republican Rep. Lincoln Diaz-Balart said he would vote for the bill now that it contains provisions to allow legal immigrants who have been in the country less than five years to enroll in SCHIP. His Miami district has a large population of immigrants, many from Latin America, and services for noncitizens is a major local issue. Diaz-Balart twice voted against SCHIP bills in the 110th Congress.

But Diaz-Balart said he was upset that Democrats did not allow amendments under the closed rule for debate. "That's unfortunate, unnecessary," he said. The House adopted the rule by 244-178.

Other Republicans were upset about what they called loose citizenship verification requirements. "It takes away the ability of us to verify the citizenship of people who are eligible for SCHIP," said Rep. Steve Scalise, R-La. "We need to put that verification process back in place," he said.

While the bill bars the use of SCHIP funds for illegal immigrants, it does not require SCHIP applicants to present legal citizenship documentation. Instead, they have to give their name, Social Security number, and declare their legal residency. States are then required to verify their eligibility.

The documentation changes are expected to boost enrollment, as well as costs. According to the CBO analysis of the bill, the changes to the verification section will increase spending by $2.4 billion over five years.

Senate Outlook

The Senate bill is a less sweeping $31.5 billion, four-and-a-half year reauthorization that does not include the provision allowing legal immigrants to enroll in SCHIP less than five years after they arrive in the United States.

Once the Finance Committee completes its markup, the full Senate is expected take up its SCHIP bill after is finishes consideration of a public lands bill (S 22) and a measure to facilitate wage discrimination lawsuits (HR 11, S 181)

The provision to extend services to legal immigrants is likely to be the primary sticking point in negotiations between the two chambers. But Democrats hope to have the legislation ready for Obama soon after he takes office Jan. 20.

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