Thursday, October 18, 2007

SCHIP Veto Override Fails in the House--Now What?

As expected, the SCHIP veto override effort in the House failed by a vote of 273-156--thirteen short of the two-thirds necessary.

Now what?

First, SCHIP will not expire. A continuing resolution funds the program at current levels until mid-November and that can likely be extended indefinitely. However, at current levels hundreds of thousands of kids will eventually fall off the program.

The Democratic leadership has two choices:
  • They can send the President essentially the same bill again. Some Dems want to do that early next year so he can veto it again in an effort to keep the issue alive and festering as we go into the election-year. Their assumption is that Bush's position is very unpopular and will continue to be so.
  • The Democrats can go back to their Republican allies on SCHIP and try to get a smaller extension deal Bush will accept. The President has said he is willing to move off of his position of spending only $5 billion more to a one that would at least keep those kids who are on the program funded. While the vetoed bill would have spent $35 billion more, a bill that would maintain the program at current levels would cost closer to $15 to $20 billion in additional funds over five years.
The Democrats should be worried about overplaying their hand.

A recent USAToday poll found that 52% of voters trusted the Democrats more on SCHIP. But when asked if the program should be limited to poor families below 200% of poverty (Bush's position), 52% said they agreed. In addition, 55% said that they are very or somewhat concerned that the higher SCHIP limits in the vetoed bill would create an incentive for families to drop private coverage.

The bottom line is that the Democrats have won the public opinion battle over SCHIP so far. But, it looks like the tide could turn.

The Congress also has 12 appropriations bills they have yet to pass which call for more spending than the President has asked for. Bush has threatened to veto all of them. After his SCHIP veto, no one doubts him. The budget is going to be a tough battle for both sides--a really tough battle.

During the next couple of months, Democrats have as much risk ahead as do Republicans. The President and Republicans may have come off as the "scrooge" in the SCHIP debate so far but those poll numbers showing little support for SCHIP beyond 200% of poverty give Republicans hope the tide can change as they try to paint the Democrats with that old "tax and spend" brush.

The Congress also has the final omnibus budget bill ahead where they will likely to deal with the 10% Medicare physician fee cuts that are going to happen on January 1 if something isn't done. Medicare Advantage payments to HMOs are still very much a part of that issue.

We only have ten weeks left in the year and a lot of tough work--and tough strategy decisions--ahead!

The fact that President Bush has said that he is willing to compromise on SCHIP--and spend more--indicates that he is willing to talk and this does not have to be part of a budget fiasco.

It doesn't have to be, but it might.
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