Improves Children's Health Care Plan

                                                                                         

The plan, which passed with bipartisan support, bolsters our national defense, allows additional funding for children's health care and increases support for our veterans.

This blueprint for America's budget is an important milestone because Congress was unable to pass a budget in three of the last five years. This budget:

-- Improves children's health care by expanding funds available to the State Children's Health Insurance Program.

-- Invests in education by increasing funds for No Child Left Behind and Pell grants.

-- Creates a deficit-neutral $20 billion reserve fund to increase funding for energy, disaster assistance and commodity support in the next Farm Bill.

The Bush administration said Saturday that senior advisers would recommend the president veto Senate legislation that would substantially increase funds for children's health insurance.

The legislation calls for a 61-cent increase in the federal excise tax on a pack of cigarettes. The revenue would be used to subsidize health insurance for children and some adults with incomes too high to qualify for Medicaid but not enough to afford insurance on their own. Members of the Senate Finance Committee brokered a bipartisan agreement Friday that would add $35 billion to the program over the next five years. The Bush administration had instead recommend $5 billion.

The Senate legislation expands the State Children's Health Insurance Program beyond the original intent of the program, said White House Spokesman Tony Fratto.

'It's clear that it will have the effect of encouraging many to drop private coverage _ purchased either through their employer or with their own resources _ to go on the government-subsidized program,' Fratto said. 'Tax increases are neither necessary nor advisable to appropriately fund SCHIP.'

Congress is considering renewing the program before it expires Sept. 30. When Congress approved the program in 1997, it provided $40 billion over 10 years. States use the money, along with their own dollars, to subsidize the cost of health insurance. The federal government covers about 70 percent of the cost.

'Congress needs to deliver a bill the president can sign or they need to send him an extension so that people don't worry about losing their current coverage,' Fratto said. 'It's important that Congress understands the serious consequences of delaying this or sending the president legislation that he clearly cannot sign.'

Fratto also called on the Senate Finance Committee to consider the president's recommendation to tax employees on the health insurance premiums paid by their employers. The president would offset the increased taxes by giving taxpayers a deduction or credit. The result would be a tax cut for most families, but not for those with the highest-priced insurance plans.

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