I'm a Pundit Too

Thursday, July 26, 2007

CAGW Names Sens. Baucus and Smith Porkers of the Month

Washington, D.C. - Citizens Against Government Waste (CAGW) today named Senate Finance Committee Chairman Max Baucus (D-Mont.) and member Gordon Smith (R-Ore.) Porkers of the Month for July, 2007. They have led the effort to expand, instead of reform, the State Children's Health Insurance Program (SCHIP).

SCHIP was created in 1997, and approximately $40 billion has been spent over 10 years to help states provide health insurance coverage to children in low-income families who earned too much to qualify for Medicaid. The original eligible population was families with incomes at or below 200 percent of the federal poverty level, which is about $40,000 for a family of four in 2007. Several states, using Medicaid waivers, have expanded the eligibility level to 300 percent of poverty and added new populations, such as pregnant women and other adults, costing taxpayers additional monies. The Bush administration’s budget included a five-year $4.8 billion increase in SCHIP over current levels, which was estimated to provide coverage for the families within the program’s original level of 200 percent of poverty.

The Senate Finance Committee, led by Chairman Baucus, approved a $35 billion expansion over current funding levels for SCHIP on July 19, putting the new price tag at $60 billion over five years. It will expand eligibility to families at 300 percent above the federal poverty line, or $61,950 for family of four. The legislation phases out some adult coverage, but the bill could be amended on the Senate floor by lawmakers wanting to restore such eligibility and expand coverage to those families at 400 percent of poverty, or $82,600.

Expanding access to federal government healthcare will dramatically increase the power of the government in all healthcare decision-making, including treatments, drug and physician availability, and medical research, paving the way toward universal healthcare. Families who currently have private coverage will have a strong incentive to switch to the SCHIP program, crowding out private insurance and raising the price for everyone else.

To pay for SCHIP’s higher costs, Sen. Smith proposed raising tobacco taxes up to $1.00 per pack, an increase of 61 cents or 156 percent. The Finance Committee bill includes such an increase, as well as a 20,000 percent rise in cigar taxes, from five cents to $9.95 per cigar. Ironically, cigarette taxes target those SCHIP is supposed to help: the working poor, who are statistically more likely to smoke. Excessively high excise taxes lead many consumers to circumvent the tax by purchasing products out-of-state, online, or through illegal sales. It also reduces the number of smokers. Paradoxically, the Heritage Foundation found that the government needs 9 million more smokers in the next five years to pay for the program, and 22.4 million by 2017. Since that is unlikely, projected excise tax revenues will not materialize and all taxpayers will foot the bill for SCHIP in other ways.

For pushing a program that is the first step in creating government-controlled universal healthcare, instead of enacting reforms such as adopting tax credits or converting SCHIP into a defined contribution to allow low-income families to purchase private health insurance, and increasing taxes in a manner that will not provide sufficient funding, CAGW names Sens. Max Baucus and Gordon Smith its July 2007 Porkers of the Month.

Citizens Against Government Waste is the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.

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