GOP Expects SCHIP Conference To Bog Down In Senate

9/05/2007

The news reported in the Congress Daily AM on SCHIP reauthorization does not look promising at the moment.

Congressional Republicans expect that the House and Senate will be unable to produce a conference report before the State Children's Health Insurance Program expires on Sept. 30, GOP aides said Tuesday, citing staunch opposition in the Senate to cutting private Medicare Advantage plans, a cornerstone of the House bill.

Without a conference report, lawmakers will be required to pass an extension of SCHIP, likely at current levels. It is unclear whether that extension would last for an entire year, kicking debate on the issue into the next congressional session, or a few months to give lawmakers a chance to make a deal.

Senate Finance Chairman Baucus and ranking member Charles Grassley, R-Iowa, want an SCHIP conference report to adhere closely to the Senate bill, aides said Tuesday. The Senate bill would add $35 billion to SCHIP. It was carefully negotiated over months on a bipartisan basis and garnered a veto-proof 68 votes before the August recess.

Republicans, by contrast, were shut out of negotiations on the House bill, which would add $50 billion to SCHIP and make several changes to Medicare, including $35 billion in cuts to Medicare Advantage extra payments. The House bill staves off a scheduled cut to physicians' payments under Medicare.

Baucus and Grassley have expressed concerns with the inclusion of the physicians' fee language in the House bill, noting that an SCHIP reauthorization should focus solely on children.

House Republican Conference Chairman Adam Putnam of Florida Tuesday said House Republicans prefer the Senate bill. It remains to be seen how conferees can overcome the vast differences between the two bills, he said. "I hope for future generations' sake, the House version is not adopted," said Putnam.

House Democrats have difficulty with the other major revenue raiser in their bill -- a 45-cent per-pack cigarette tax increase -- and it is unclear whether they would be able to push the Senate's larger cigarette tax increase -- 61 cents per pack -- through their caucus.

Not coming to terms on the bill would be a significant political loss for Democrats looking to use an SCHIP expansion to gain political points with voters heading into the 2008 elections.

"It's one of those feel-good issues that plays well with the base as well as some swing voters," said one Democratic leadership aide who acknowledged that the House add-ons create a clear problem in the Senate and threaten the political strategy.

The political downside is particularly significant for House Democrats who have touted the expansion back home, the aide said. Not only have Speaker Pelosi and other Democratic leaders pegged the House bill as a major achievement, but several freshman Democrats facing their first test as incumbents next year touted their support for the bill over the August recess. They were prompted to do so by Democratic Caucus Chairman Rahm Emanuel of Illinois.

"If there's not an expansion, blaming the Senate or Republicans is not going to accomplish much," said a senior aide to one freshman Democrat.    By Fawn Johnson and Christian Bourge