What Will It Take to Get a SCHIP Bill This Year? The Budget Outlook Deteriorates Even More

Democratic and Republican negotiators are hard at work to get an agreement on the State Children's Health Insurance Program (SCHIP) extension.

The current SCHIP bill failed to get a veto-proof majority in the House.

President Bush has said there is no way he will sign a SCHIP bill with a tax increase in it--the current bill would increase the per pack cigarette tax by 61 cents.

The only way the Democratic leadership can pass a veto-proof SCHIP bill is to peel off enough Republicans to have the two-thirds necessary--something they have already accomplished in the Senate and need about 10 votes to do in the House.

First, the conversations between the needed Republicans and the Democrats don't include dropping the cigarette tax. Bush is on his own on that one.

The deal can be done if Democrats assure the Republican fence-sitters of two things:

1. That only citizens and documented immigrants will be eligible--that these rules have been significantly tightened-up.
2. That the first priority is covering kids below 200% of poverty, before 300% of poverty. The Republican House leadership wants 90% of children in families below 200% of poverty covered before going to 300%. However, getting it that tight won't be necessary to get enough Republicans to accomplish two-thirds support in the House.

More than anything, Congressional Republicans want to get this off the table--they are not winning in the polls.

Even more, the regular 2008 budget process continues to deteriorate. Federal department and agency heads have already been put on alert to the possibility that the federal government will be operating on temporary "continuing resolutions" for as long as February 15th.

The Democrats' recent attempts to couple the Labor/HHS spending bill with the Veterans/Military Construction bill has not only flopped but backfired with the fence-sitting Republicans they needed to attract, making the already contentious budget process even worse.

President Bush has said he will veto at least 10 of the 12 upcoming appropriations bills and it is clear the Democrats have yet to find the formula they will need to overcome those Bush vetoes.

The upcoming January 1, 2008 Medicare physician fee cuts and proposed Medicare Advantage cuts to pay for that fix have yet to be dealt with. I heard someone on the Hill say the other day that it looks like that issue combo will be the last two things to be dealt with in what is turning out to be a more and more problematic budget process.

But don't let all of this budget news convince you they won't be dealt with. If the doc cuts aren't reversed, the fall-out will be significant.