Bush Veto Threat Could Stall SCHIP Funding

President Bush has threatened to veto House and Senate versions of a supplemental appropriations bill that would provide emergency funding for the State Children's Health Insurance Program, or SCHIP, a move that could further delay money for states without enough funds to cover SCHIP shortfalls this year.

On March 23, House members passed a supplemental appropriations bill, (PDF file: 5 pages / 66 KB. More about PDFs.) H.R. 1591, that is primarily intended to fund military operations in Afghanistan and Iraq but that also includes $750 million for 14 states currently facing SCHIP shortfalls. However, the House bill contains benchmarks for the withdrawal of American troops from Iraq, and President Bush has vowed to veto the legislation if it reaches the White House in its current form.

The Senate, meanwhile, passed its own version of a supplemental appropriations bill on March 29 that contains $745 million for SCHIP. That legislation also sets a target date for troop withdrawals from Iraq, a prospect that has prompted another veto threat from Bush.

House and Senate members are likely to work out details of a broad outline of a House/Senate spending bill by mid-April when they return from Easter break. It is expected they will send a final bill to Bush by the end of April that will include troop withdrawal provisions, guaranteeing a Bush veto and thus delaying emergency funding for SCHIP.

The SCHIP program, which currently insures about 6 million children and 600,000 adults nationwide, will expire on Sept. 30 unless Congress reauthorizes it. Even though there is broad bipartisan support for the program, SCHIP reauthorization is emerging as a contentious issue. The Bush administration and some congressional Republicans differ with Democrats about funding levels for the program and the extent of coverage provided under the initiative, setting up a battle over the program's future.

The president, in his 2008 fiscal year budget, proposes reauthorizing SCHIP for the next five years but would fund the program at less than half of what is needed to sustain it at current coverage levels during that period, according to the Center on Budget and Policy Priorities.

"Under the president's budget, we estimate that states would experience a total federal funding shortfall of $7 billion over the next five years," the Center said in a March 13 budget brief on SCHIP.

Bush and some Republicans in Congress want to narrow the focus of the program by limiting SCHIP coverage to children who are considered poor, generally defined as living below 200 percent of the federal poverty level. Bush also wants to exclude parents and adults from the program.

Congressional Democrats, for the most part, see SCHIP reauthorization as a chance to renew and greatly expand the program to cover more children and adults, and they have introduced a series of bills during the past few months to accomplish those goals. Their efforts are strengthened by state initiatives to expand coverage to all uninsured children through SCHIP and Medicaid, said Genevieve Kenney, principal research associate for the Urban Institute, an independent research organization in Washington.

"More and more states are trying to put together universal health care plans for children with SCHIP," said Kenney. "Many governors are going to put pressure on their representatives in Congress to fully fund and expand funding for SCHIP."