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SCHIP expansion needs revenue

TEXT OF STORY

Bob Moon: The House of Representatives will try to hand the incoming president an early victory today by expanding the State Children's Health Insurance Program, better known as SCHIP. President Bush twice vetoed previous congressional bills to make 4 million more low-income children and pregnant mothers eligible for government health insurance. President-elect Obama says he'll sign it. But our D.C. bureau chief John Dimsdale reports Washington doesn't have the final say.


John Dimsdale: SCHIP is run by the states, and they have to put up some of their own money before they can receive federal dollars. State revenues are way down in this economy, and governors will be hard-pressed to find the resources to expand health benefits for children.

Oregon Governor Ted Kulongoski has proposed raising taxes on health care providers to come up with the money.

Ted Kulongoski: There's a revenue source under the provider tax of hospitals and insurers. We have utilized them for a number of years as the funding source for the match. And we're going to do it again.

To pay for expanding the federal SCHIP program, the bill's supporters want to hike tobacco taxes. Some Republicans call that a budget gimmick, since higher taxes will mean fewer cigarette sales and therefore less revenue.

But Colorado Democrat Diana DeGette, a leading House sponsor of SCHIP, says that's fine by her:

Diana DeGette:

I would be happy for the day when we have to find another source of revenue because we have decreased smoking.

The Senate hasn't decided when to take up SCHIP expansion, although leaders say they want to get it to the new president's desk early in his administration.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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