SCHIP Bill: Extending Benefits or Middle-Class Welfare?

November 30, 2007
On Wednesday October 3rd, President George W Bush used his constitutional prerogative for the fourth time to veto the State Children’s Health Insurance (SCHIP) reauthorization bill. Senator Harry Reid (Nevada) disparaged Bush’s actions as a “heartless veto.” The Democrats, with momentous support from Republicans, passed the legislation to add $35 billion over a period of five years to allow an additional 4 million children into the program. It would be funded through raised taxes on cigarettes.
The State Children’s Health Insurance Program (SCHIP) is a joint state- federal effort that promotes health coverage for 6.6 million people in the United States (mostly children) for families who earn too much to be eligible for Medicaid, but not enough to meet the expense of their own private coverage. This vetoed bill would have allowed states to extend coverage to families with incomes of three times the poverty level. Thus, a family of four, with two children, earning $61,332 a year would be eligible for SCHIP.
When first hearing about the SCHIP bill, the president promptly promised to veto it. He claimed that the Democratic bill was too costly; instead of assisting the underprivileged (the original plan), it tempted people covered by private insurance to switch to governmental coverage. Only a $5 billion increase was suggested. Bush criticized Democrats by claiming that they lived by the “tax-and- spend” philosophy.
"The Congress now sitting in Washington holds this philosophy," Bush told an audience of business and community leaders. "The majority was elected on a pledge of fiscal responsibility, but so far it's acting like a teenager with a new credit card.”
Smokers, many of whom are low-income people, are the ones who have to pay the cost of SCHIP expansion under the bill that Bush vetoed. The bill would have raised the tax to a dollar per pack; the current tax price is 39 cents per cigarette pack. If the bill had been passed, the rate of smoking Americans could have decreased rapidly. Representative Gene Taylor (Mississippi), one of the only eight Democrats to vote against the SCHIP expansion, represents one of the lowest-income districts in the nation. He claimed that the tax increase was iniquitous.
“I do have a lot of folks in my district who are not wealthy, and I regret to say a lot of them are smokers,” Taylor said. “This is a tax on the least of us.”
Representative Mike Pence (Indiana) commented with “The headline ought to read, ‘Smokers in America to pay for middle-class welfare!”
Is SCHIP expansion middle-class welfare, as Pence argues? Is the expansion an attempt by Democrats to entice middle-class voters by extending benefits to them that were once available only to lower-income people? That, my dear readers, is now up to you!

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