The SCHIP Veto Confrontation 
By John McClaughry

A high-stakes political confrontation is now under way over SCHIP, the State Children's Health Insurance Program. The exploding partisan confrontation marks the end game of the eight years of the presidency of George W. Bush. It will feature a lot of partisan charges, serious distortions of the truth, and political fireworks intertwined with the 2008 election process.

SCHIP is a federal-state grant program enacted in 1997. Its purpose is to pay for health care for children from working families who earn too much to qualify for Medicaid. Its ten-year authorization expires October 30. On September 28 President Bush vetoed the sharply expanded reauthorization bill sent to him by the Democratic Congress. Congress will vote on overriding the veto sometime this month.

Already the state's liberal voices are in full-throated attack mode. The three-man Congressional delegation issued a statement accusing Bush of lusting for war in Iraq, but oblivious to struggling working families here at home. Sen. Bernie Sanders is certain to tap his inexhaustible supply of outrage to denounce the heartless monster in the 
oval office.

Republican Gov. Jim Douglas, whose administration needs federal money to slow down the coming shortfalls in Vermont's health care programs, says he urged the President to sign the bill. Douglas says he hopes that a legislative solution can be found, but if not, he would entertain the idea of having Vermont join in yet another political lawsuit.

The lawsuit would ask the courts to declare that the federal government, in sending billions of tax dollars to the states, cannot impose the cruel, mean-spirited requirement that benefits for families of four be given out only when their earnings are less than $53,000 a year.

The Democrats see the Bush veto as a wonderful opportunity to pound lumps on a Republican president they detest. This is especially attractive since the new fire-breathing liberal Congress has been embarrassingly unable to force an immediate abandonment of Iraq. Nor will it dare to enact an enormous carbon tax to fight what liberals have declared to be the Menace of Global Warming, or reinstate the Clinton gun control laws, or enact another universal taxpayer-supported Hillarycare health plan.

The SCHIP veto has become the one issue the Democrats can use to flail Bush before he departs, and hang the "mean to children" millstone around Republican necks in election 2008.

The vetoed bill offers liberalized eligibility (for the children in a family of four with an income up  to $63,000) and more crowding out of existing private coverage, paid for by more Federal taxes. Congressional liberals see this expansion as an important step toward their ultimate goal of federally controlled, taxpayer-financed health care for everybody.

For their part, the Republicans are concerned about higher deficit spending. Since this is a new thing for them (since the Bush Administration came to office), that objection is not very credible. Their more serious objection is the flip side of the Democrats' greatest motivation: that SCHIP expansion will lead to federally-controlled, taxpayer-financed health care for everybody. Maybe the Republicans should have thought of that when they sent the original SCHIP bill to President Clinton for his signature.

The sad thing here is that this political steel-cage match diverts attention from what ought to be the central debate over health care. That debate addresses such questions as, who is primarily responsible for your health care? You and your doctor, or everybody?

How can people better learn to self-manage their own health and treatment protocols, thus reducing the costs now paid to drug companies and the medical industry?

Can governments mandate that everyone make advance provision for their possible health care needs? If so, what is the penalty for those who refuse?

Should public policy continue to link health insurance to the place of employment, with special tax benefits for that arrangement? Or should it offer tax parity or benefits to individuals who purchase and own their own policies?

"The poor" will continue to have their health care needs met, one way or another, at taxpayers' expense. How about the non-poor? Who are the non-poor? Families of four earning over $42,000 (as under SCHIP originally)? Or more than $63,000 (Catamount Health)? Or more than $83,000 (New York's demand)?

How much of today's uninsured problem is due to the inflated cost of insurance premiums caused by state interference with the health insurance market? How much of the problem would go away if the market were left to function, with tax parity?

How can the health care system modernize, through medical technology, information technology, telemedicine, safety protocols, and chronic care management, to restrain cost increases?

Voters won't hear much on these questions in the next few months, because the SCHIP veto battle will drown out all intelligent discussion. Let's hope that the serious discussion resumes soon thereafter.
 

John McClaughry is President of the Ethan Allen Institute