Budget request from President Bush to increase spending for SCHIP by $19.7B over five years

Feb 4 2008

President Bush on Monday will release a $3 trillion fiscal year 2009 budget request that would significantly reduce or eliminate spending for dozens of health and other programs but would significantly increase spending for SCHIP, the New York Times reports.

HHS Secretary Mike Leavitt on Friday said that the budget request will include a $19.7 billion increase in federal funds for states for SCHIP over the next five years. Under the budget request, spending for SCHIP would increase to $45.1 billion in FY 2013.

Leavitt said that the increase would allow SCHIP to provide health insurance for children in families with annual incomes as much as 200% of the federal poverty level, the "original intent" of the program. The increase would divide the difference between the $5 billion increase that Bush requested last year and the $35 billion increase that Congress sought. "It is not clear when the White House concluded that $19.7 billion was needed, a question that lawmakers are sure to pursue in hearings," the Times reports (Pear, New York Times, 2/1).

Reaction to Proposed Reduction in Medicare, Medicaid Spending
Lawmakers and lobbyists likely "will spend the bulk of the week reacting" to a $200 billion reduction in spending for Medicare and Medicaid over five years included in the budget request, CongressDaily reports (Cohn/Strohm, CongressDaily, 2/4). According to CQ Today, hospitals will "bear the brunt of the Medicare cuts," but Bush likely "won't propose cuts to private health plans in the Medicare Advantage program."

Lawmakers and lobbyists predict that "Congress will ignore President Bush's call for significant cuts in Medicare and Medicaid," according to CQ Today (Reichard, CQ Today, 2/1). Congress rejected a smaller reduction last year, and "there's no reason to think they would rise to the challenge in an election year," the AP/Contra Costa Times reports (Taylor, AP/Contra Costa Times, 2/2).

Prospects for Budget Request
Bush "wants to dramatically slow the growth of big federal health programs" in his budget request, but lawmakers and their aides "say Bush has little leverage left to force his proposals on a recalcitrant Congress," the Washington Post reports (Abramowitz/Weisman, Washington Post, 2/3). According to the AP/Times, "Congress is ultimately likely to reject" reductions in spending for HHS included in the budget request, and the "gulf" between Bush and lawmakers "could mean gridlock that would tie up the agency's budget until Bush's successor takes office" (AP/Contra Costa Times, 2/2).

Bush "had success last year using his veto to trim back spending bills," but "this year Democrats are better positioned to simply wait for the next president," which could "mean less ferocity than usual in the budget battle as both sides wait to see the results of November's election," according to the Post (Washington Post, 2/3).

Editorial
The budget request includes "significant cuts to the Medicare and Medicaid programs" that "would not apply to the federal payments that private insurers receive" for MA plans, which "have been rife with overpayments," according to a Las Vegas Sun editorial. The editorial states, "A splendid plan, Mr. President. Slash the services that allow people to live at home longer and avoid expensive nursing home care, then cut reimbursements to nursing homes so that they have room for fewer patients." Democratic lawmakers have said the budget request "hasn't a chance of survival, and we hope that's true," the editorial states, adding, "Bush's proposal would be a terrible, cruel way to treat our nation's sick" (Las Vegas Sun, 2/4).