SCHIP Program

Robert Novak on the SCHIP program:

"The Senate's vote to expand the State Children's Health Insurance Program (SCHIP) to the non-poor and to finance it with a large hike in cigarette taxes, represents a major step in the direction of universal health care. It will also likely result in a future funding crisis.

1. Although the administration has threatened to veto this $50 billion expansion of SCHIP, Democrats would love to have a vote or veto "against the children" to hold against Republicans. This illustrates their cynicism behind this proposal, but President Bush's cynicism is also evident. Compare his support for a much larger, more expensive, and politically important prescription-drug plan for senior citizens.

2. From a taxation point of view, there are two arguments against SCHIP expansion: First, cigarette taxes represent a very unreliable funding stream. To the extent that health education campaigns and price increases have helped bring down the number of smokers in the United States, they also threaten the government's stream of revenue. This means that another tax increase will be needed to sustain the newly expanded SCHIP in the future.

3. Second, because the bill could lead states to give government health coverage to children in a family of four making up to even $80,000, the bill redistributes income in a regressive fashion -- from the poor (and smokers are disproportionately poor) to the middle class. This too is similar to the prescription-drug bill, which promised subsidies for the prescriptions of the nation's wealthiest demographic, senior citizens, at the expense of young workers."

Novak fails to mention, they want to extend this program to illegal immigrants as well.