Friday, July 13, 2007

Key Republican Senators Call on President Bush Not to Veto S-CHIP Reauthorization--A President Acting Like He Has Nothing to Lose

On Thursday I commented on the Senate Finance deal to reauthorize the State Children's Health Insurance Plan (S-CHIP). The bipartisan deal calls for a $35 billion expansion of the program, reversing state efforts to use it to cover adults, and pays for it with a whopping new 61 cent per pack tobacco tax.

Yesterday, two very important Republican members--Grassley and Hatch--of the Senate Finance Committee called on the White House to stop their S-CHIP reauthorization veto threats--the President wants an increase in S-CHIP spending of $5 billion.

The S-CHIP reauthorization process is quickly becoming not a Republican versus Democrat battle but a Congress versus the President fight.

To be sure, there are lots of conservative Republicans that side with the President in their concern that S-CHIP has expanded too quickly and beyond its original scope. But it is clear that about all Democrats and lots of important Republicans are going to go along with this deal.

In fact, the House wants more. House Democratic leaders want to spend $50 billion and they not only want a tobacco tax but they want to cut the private Medicare Advantage program to come up with more money.

My sense continues to be that:
  • The Congress will reauthorize S-CHIP along the lines of the Senate Finance deal.
  • Medicare Advantage payments to health plans will be cut at year-end as part of the final budget reconciliation process to pay for Medicare provider payments--particularly the coming 10% physician fee cuts.
  • Medicare private Fee For Service will take the biggest of the cuts--perhaps seeing those payments frozen.
However, where I have begun to wonder is over George Bush and how he is going to respond to this S-CHIP spending specifically and the upcoming Democratic spending bills in general.

This President has never vetoed a spending bill--even when the Republican Congress spent like a "bunch of drunken sailors." (He did veto an Iraq spending bill over a troop pull-out amendment.)

No modern president has every been weaker politically. Now, his Iraq problems look to be snowballing on Capitol Hill creating even more political problems for him.

Two very loyal and important Republican Senators have now told him "hands off" on S-CHIP. When you think about it, that's pretty incredible in its own right and says a lot about his political weakness.

While I sense that both the House and Senate can easily pass the Senate Finance compromise on S-CHIP, I also don't see the two-thirds margin necessary to over-ride a Bush veto.

I have to tell you that I just get the sense we could be in for a major showdown between the President and the Congress--including key Republicans. It looks to me like Bush is now acting like he has nothing to lose in staying his course on all of his issues--including health care.

Passage of the Senate Finance compromise on S-CHIP and a veto by Bush would just push the whole thing into the year-end reconciliation. Load that up with lots of things Bush won't accept and he just might elevate this to the kind of government shutdown battle we saw in 1995/1996 between Gingrich and Clinton.

The prospect from anything like that and the resulting fallout in an election-year has to have plenty of Republicans really worried about a President with nothing to lose.

Thursday's Post:

Senate Finance Committee Reaches Bipartisan Agreement to Fund S-CHIP Expansion With a Tobacco Tax--No Cuts to Medicare Advantage


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