Bush ties tax plan to health measure
President Bush reignited debate of the administration’s health care reform proposals in Congress this week, saying that his idea to reform the tax code’s health care provisions should be included in children’s health insurance legislation.
Mr. Bush spoke yesterday about the State Children’s Health Insurance Program, or S-CHIP, which was created for families whose incomes are too high to qualify for Medicaid, but who have a hard time affordingprivate health insurance.
Congress‘ authority to provide more funding for the program expires on Sept. 30 and lawmakers have been working feverishly on legislation to reauthorize the program.
Up to now, talk on Capitol Hill about the president’s health care reform proposal, made in this year’s State of the Union address, has been nonexistent, and the White House hasn’t exactly been knocking down people’s doors either. But yesterday, Mr. Bush and his health care advisers dropped a bomb on the S-CHIP negotiations by saying that Congress should be considering his proposals as part of that legislation.
“We believe that the debate should include not just children, but all Americans. We expect that the S-CHIP debate will enliven the entire discussion over health care. We believe this debate will mature in the context of the S-CHIP discussion, and that there are groups all through Congress now working on different strategies that, in time, will consolidate into what I think will be a fairly focused proposal. This is the moment that it could be done,” said Health and Human Services Secretary Michael O. Leavitt.
The administration’s desire presents a problem as the two sides are already far apart on how much money should go toward S-CHIP. The president’s budget, released in February, proposed $5 billion extra for the program. But lawmakers say that is about a third of the amount needed just to maintain the program’s current enrollment numbers.
“The problem is that Democrats want to expand S-CHIP far beyond its original intent. If their proposal becomes law, S-CHIP would expand its reach to include children from families that earn as much as $80,000 a year, as well as some adults. This is a massive expansion of the program,” the president said.
Congress wants to use the reauthorization opportunity to try to provide health insurance for some or all of the nine million uninsured children in the United States. That will be costly, as their proposal, which calls for $50 billion more to the program, reflects.
Not only are the two sides opposed philosophically and on the amount of funding for S-CHIP, but the Democratic Congress is not a fan of the president’s tax reform proposals.
Under the president’s plan, a standard health care deduction of $7,500 would be made available for individuals who purchase health insurance on the private market — not through their employer — and a $15,000 deduction would be available for family-purchased health care on the private market.
“Congress has a solemn responsibility to renew the S-CHIP program and to find ways for more children to benefit from this proven success,” said Sen. Max Baucus, Montana Democrat, and chairman of the Senate Finance Committee, which oversees the S-CHIP program. “Replacing this effort with controversial health care tax proposals would not be a responsible path to take.”
Critics of the plan say the deduction will erode the employer-based system, which provides insurance for 160 million families. Another critique is that the plan would only reach between 3 million and 5 million of the 47 million uninsured Americans.
The two sides are entrenched. When asked if the president would consider raising his funding proposal for S-CHIP if the tax reform proposal were considered, Mr. Leavitt didn’t budge.
“The president has a budget. He has funded S-CHIP in a way that will reconcile to that budget. It’s very clear to me that he does not support a $50 billion expansion of government-run health care.”