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It's Time To Drop The Tobacco Tax From SCHIP

[ Posted Thursday, December 13th, 2007 – 16:35 UTC ]

President Bush, in his seventh-ever veto, has just rejected the second incarnation of the State Children's Health Insurance Program bill, otherwise known as SCHIP. That's a pretty bold move to make in December, you've got to admit, since the inevitable comparisons to the Grinch will abound (House Democrat Louise Slaughter even has her own YouTube video up on this theme). While there are enough votes in the Senate to override Bush's veto, there are not enough in the House to do so.

I've written about SCHIP many times before. It's a brilliant political piece of legislation, because it works so well as a wedge issue in the Republican party -- it's got a veto-proof majority in the Senate, and a near-veto-proof majority in the House because more and more Republicans are getting on board, fearing the issue will be used effectively against them in next year's elections.

This is all well and good, and is how politics is supposed to be played, in the midst of getting something good done. Unfortunately, the Democrats are now about to throw out the baby's health insurance with the election-season bathwater. From the New York Times article on the veto:


Bush urged Congress to extend the program at its current funding level before lawmakers leave Washington for their holiday break.

In fact, congressional leaders had already said earlier Wednesday that they now will try only to extend the State Children's Health Insurance Program, or SCHIP, well into 2008 in basically its current form. Their comments signaled that they have given up efforts to substantially expand the program.

The House voted 211-180 late Wednesday to put off until Jan. 23 a vote on overriding the president's veto. "We are not going to let this veto stand," said House Speaker Nancy Pelosi. Republicans said Democrats were scheduling the veto override vote to coincide with the week Bush comes to Congress for the State of the Union address.

. . .

But such votes are uncomfortable for GOP lawmakers. It is a popular program with the public, making some Republicans wary of sticking with Bush on such an issue with the 2008 elections looming. Of the 43 million people nationwide who lack health insurance, more than 6 million are under 18 years old. That's more than 9 percent of all children.

House Majority Leader Steny Hoyer, D-Md., said the House will take up the extension question Thursday in a bill that also will make adjustments to Medicare.

"We'll obviously need to put additional money" into the children's health insurance program, Hoyer said, because several states say they will have to remove recipients from their rolls if the current funding level continues into next year.

Hoyer declined to say how much new money would go into the program or how long it might be extended. In the past, top Democrats have suggested they might extend the program until September or October, allowing them to reconsider it shortly before the 2008 elections.

Got all that? The House voted to put off trying to override Bush's veto until they could make some political hay with it right before Bush's State of the Union address. Rather than making some political hay with it right now -- right before Christmas. And then they might just punt the ball down the road until it can be used as a political club right before next year's elections.

Now, I am often accused of seeing everything through the lens of partisan politics. But this just takes the proverbial cake. Democrats are leaving themselves wide WIDE open to attacks by Republicans -- "Instead of actually working together to get kids health care, Democrats chose instead to deny health care for another year so that they can play politics with the issue."

And you know what? They will be right. Because that is exactly what Democrats will be doing.

There's a better way to do this. Republicans have been given political cover in this fracas by the method Democrats have written into it to pay for the bill -- a steep hike in tobacco taxes. This "anti-tax" political cover needs to be removed, in one way or another, to get the issue focused where it should be -- on who is fighting for children's health, and who is denying it to them.

The tobacco tax is wrong for this bill for a number of reasons. First, the two have nothing to do with each other. Second, it's a regressive tax. Third, the "pay as you go" rule is already being broken in other legislation, so why not this bill, too? Fourth, even by removing the tobacco tax, you can still make good political hay out of the issue while doing so. And fifth, because by removing it you could probably get over the bar of a veto-proof majority in the House.

Breaking these down, one at a time. OK, a smoking tax kind of has something to do with health care. But it has nothing whatsoever to do with children's health care, unless the little nippers are lighting up behind the barn. Democrats chose this particular tax to go with this particular bill, because both are seen as popular. That's the only reason they're tied together in the first place -- politics. What is and what is not politically feasible. Think about it -- we could directly tax parents in lots of ways if we wanted them to bear the tax burden of their children's health care. Cut the break parents get on their income taxes for each child, for instance. But -- as should be obvious -- politically that would be a non-starter (to put it politely). Or if you wanted to institute a "sin tax" you could go after a much bigger target -- an alcohol tax. But more people drink than smoke, so that one's not going anywhere politically either. If we really wanted to spread the pain around equally, then the bill would have done away with the block-grant nature of SCHIP altogether and just rolled every kid in America into Medicare -- now that would have been an achievement, but it's likely too late to attempt something of this magnitude.

Which brings us to the second point. A "regressive" tax means those with the least ability to pay have to pay the most (like payroll taxes). A "progressive" tax is one where those with the most also get taxed the most (like the income tax). Democrats are supposed to be for the latter, not the former. But tobacco taxes hit the lower income classes harder, because they're more likely to smoke. Is this really the only tax Democrats are going to fight to the mat on? One that hits poor people the hardest? Why not switch it to one of the tax proposals from the presidential campaign trail -- taxing hedge fund millionaires the same rate as nurses, firefighters, and policeman, for instance? Or getting rid of Bush's ridiculous tax breaks for the ultra-wealthy? Why not, in other words, fund this wildly popular program with a Democratic tax idea?

The easiest thing to do, in my opinion, would be to just scrap the tax idea altogether and pass the bill as it is, with no funding. This would focus the debate on the insurance proposal itself by removing the issue of the tax altogether. Sure, this is "fiscally irresponsible," but that's a label to hang around Republican necks, not Democratic ones. "We tried twice to get Republicans to pass this law with a fiscally responsible way to pay for it, and President Bush and enough House Republicans refused to do so. They are fighting hard for fiscal irresponsibility, so we agreed to allow them to run up our deficit even higher -- because this program was just too important not to pass." It's pretty easy to turn it into a political club to use against the GOP if the subject of fiscal responsibility comes up, in other words. And by doing so, Democrats would successfully remove the one straw some on-the-fence Republicans are clinging to -- they don't want to vote for any tax increase, ever. OK, fine. Remove the tax increase, and defy them to vote against it again.

Republicans, especially in the House, are very, very nervous over this issue. They have a right to be. Because television ads have already been playing in their districts over their votes, and they've gotten an earful about it from the folks back home. All they need is a little push to get them to vote to override a Bush veto, and the tax issue is the best one to use to push them -- because by backing down on the tax, you don't have to back down on the core provisions of the bill itself. Compromises on the health initiative would likely not even be necessary to entice enough House GOP members to break with Bush on the issue.

This is the biggest and best bill the Democrats have come close to passing this year with overwhelming Republican support. But rather than getting the job done, they have apparently decided that it is nothing more than a political football to be used in the partisan tug-of-war in an election season. This needs to stop, right now.

It's about getting kids health care, remember, it's not about getting more Democrats elected to Congress. Take out the tobacco tax, and get the job done. You can play politics with the issue later. I maintain that you can actually do both -- get this bill passed and get more Democrats elected.

If the Democrats don't see this, they don't deserve to be in charge of Congress. After all, what's the point of being the majority if you can never get anything done?

 

-- Chris Weigant

 

3 Comments on “It's Time To Drop The Tobacco Tax From SCHIP”

  1. [1] 
    fstanley wrote:

    The story of the SCHIP is why I want to pull my hair out - it is just so frustrating! Looking after the health of this nation's children should be a priority for members of both parties and not a weapon in political games.

    I understand that the Democrats have a very thin majority and need Republican support to make a bill veto proof however, putting things off is not the way to win support - it just makes them weak.

    The Democrats need to be more forceful if they want to keep (and increase) their majority in congress after the presidential election.

    ...Stan

  2. [2] 
    mhturner wrote:

    Who could be against the SCHIP bill? After all, it was written in accordance with what is now the true American spirit: "Find a way for someone else to pay your expenses!" This country has been transformed from a land where you reap what you sow, to one where we all pay something for nothing so that we may all get something for nothing. That is the true nature of this bill, yet another tax-and-spend scheme, using the poor little children as political shields. What descent human could oppose a measure to assure their health?"

    Everyone just loves Santa Clause, except for those from whom he must steal in order to be able to give away so much, The SCHIP expansion bill is another instance of our government's attempts to remove financial responsibility from a broad class of people, and instead burden those who are powerless to refuse. Rather than have everyone, or at least those who have chosen to raise children, pay for their health care, Congress is still attempting to single out a minority which they believe will not be able to defend itself, those who manufacture, sell and consume tobacco.

    The unfair and illogical use of tobacco taxes to finance programs which are being touted as essential to such a large class of people, when coupled with attempts to actually discourage tobacco's consumption, is one of the poorest strategies this writer has ever encountered. Here is an example of a business depending for its survival on increased sales of a product, and spending an enormous advertising budget to convince customers they simply cannot live without it. When everyone involved ignores the manufacturer's repeated announcements that it intends to curtail or discontinue production of the product, for which there is no substitute, there can be nothing but disappointment. The customer, who hadn't even considered shopping elsewhere, is left with nothing but empty promises, and real frustration upon finding out that those who would have provided something are no longer in business, because the competition's claims were too good to be true.

    Congress would not even dare to consider financing a measure benefiting children with taxes on such things as baby food, diapers, children's clothing, juvenile furniture or toys. Even more outlandish would be the mere thought of doing away with dependents' tax exemptions to fund their health care and education. Never in a million years could we count on something that fair happening in the land of the free and the home of the brave!

  3. [3] 
    Chris Weigant wrote:

    mhturner -

    While I agree with what you say about linking SCHIP to tobacco taxes, I have to say that I for one would love to see universal health care, or socialized medicine, come to this country. Ask any senior whether they would trade their Medicare for private health care. So what's wrong with expanding something that works to cover everyone? We're the only industrialized country in the West who doesn't do so, which I consider a disgrace.

    Anyway, I invite you to check out today's column "Democrats Cave On SCHIP" for a followup to what's going on in Washington on this. We may not see eye-to-eye, but I'd love to hear your take on it.

    Thanks for writing.

    -CW

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