UPDATE 7:27pm: The White House has indicated that the President will veto this legislation, citing the cigarette tax increase as an unacceptable way to fund the increased spending.
Tony Fratto, a White House spokesman, said yesterday that Bush's senior advisers "will certainly recommend a veto" of the Senate committee's proposal because of its size and the plan to fund it with a tax increase.
"It's important that Congress understands the serious consequences of delaying this or sending the president legislation that he clearly cannot sign," Fratto said.
Bush wants to use tax credits, rather than a tax increase, to extend health insurance benefits.
The president has sought to revive his idea of replacing the long-standing tax break for job-based health insurance with a new tax deduction that would help people pay for insurance regardless of whether they get it through their jobs or on their own.-------------
But Democrats in Congress have shown no interest in it, even after Bush said last month that he would consider a new tax credit to help lower-income people buy private insurance.
Republican Sens. Charles E. Grassley (Iowa) and Orrin G. Hatch (Utah), who helped broker the deal in the Senate Finance Committee, issued a joint statement last week calling Bush's tax code proposals "not realistic" and urging the president not to veto the $35 billion package if it reaches his desk.
"What the administration needs to understand is that if a bipartisan plan isn't achieved, then the Democratic-controlled Congress will, at the very least, extend the current program with all the terrible policy provisions that have evolved, such as waivers for childless adults and coverage for higher-income kids," the senators said.
Original post begins below:
More Health Insurance for US Poor via Cigarette Tax
This extension of health insurance to more Americans, forged through bipartisan efforts, applies to "gap" families -- those who can't afford insurance on their own, and who have incomes too high to qualify for Medicaid.
Lawmakers in a key Senate committee brokered a bipartisan agreement Friday that they said would extend health insurance to an additional 3.3 million low-income children in the U.S.
The legislation would add $35 billion over the next five years to a program that subsidizes health coverage for families with incomes too high to qualify for Medicaid but too low to afford insurance on their own. The increased funding would be paid for through a 61-cent increase in the federal excise tax on a pack of cigarettes.
Many of the details of the package were not available, but the lawmakers issued a joint press release Friday night announcing their agreement.
"The State Children's Health Insurance Program has helped millions upon millions of low-income, uninsured American kids see doctors when they're sick, and this agreement will make sure that even more children get the health care they need," said Max Baucus, D-Mont., chairman of the Senate Finance Committee, which will take up the measure next week.
Democrats had been hoping to add $50 billion instead of just $35 billion:
Democrats originally proposed adding $50 billion over five years, which would bring total spending to $75 billion. The Bush administration proposed adding $5 billion to the program over the next five years _ on top of the $25 billion available under current spending levels.
Republicans whittled away at some of the proposed spending. They said the agreement reached late Friday would also refocus the program on low-income children. They were critical of Bush administration waivers that allowed hundreds of thousands of adults to participate.
More help for poor families without health insurance is in the works:
Rep. Diana DeGette, D-Colo, said House Democrats will push for more funding than what the Senate Finance Committee leaders proposed.
"I've been talking to a lot of my colleagues," said DeGette, a member of the House Energy and Commerce Committee "They want to find a way to get $50 billion."
She said the extra money would make it easier to increase enrollment among the millions of children eligible for Medicaid or SCHIP but currently not enrolled.
She said that House Democrats would also look to higher tobacco taxes to pay for the funding increase, but they do not plan to rely solely on a tobacco tax. The bill would also reduce payments to some private insurance plans that provide health coverage through a program called Medicare Advantage, she said.
Also, while the Senate bill focuses only on children's health insurance, House Democrats intend to broaden the scope of their legislation. It will ensure that physicians who care for Medicare patients don't get a 10 percent cut in their reimbursement rates next year, she said. The legislation will also probably make changes to the Medicare drug benefit, making it easier for some low-income seniors to qualify for a larger government subsidy.
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