Smith touts tobacco tax in face of probable veto

U.S. Sen. Gordon Smith continues to champion his proposal to expand a health care program for poor children with higher federal tobacco taxes despite an expected collision with a presidential veto.

The Oregon Republican, who is up for re-election in 2008, has proposed a 61-cent-a-pack tax increase &

from 39 cents to $1 a pack &

to extend federal health care benefits to 3.3 million children whose parents earn too much to qualify for Medicaid but cannot afford to purchase health insurance.

"For the senator, there is a strong nexus between tobacco and health care costs, so for him it's a two-for: You're able to ensure there are federal dollars for the program and then at the same time you're discouraging smoking among youths," said Smith spokeswoman Kimberly Collins.

President Bush does not share the viewpoint of the senator, however, and has threatened to veto the legislation.

Approved last week by the majority of Republicans and all of the Democrats on the 21-member Senate Finance Committee, the bipartisan compromise would increase funding for the State Children's Health Insurance Program, or SCHIP, to $60 billion over five years and extend the program, which is set to expire Sept. 30 unless reauthorized by Congress.

The bill will likely reach the Senate floor next week, Collins said.

Since the program matches state dollars nearly 3-1, its passage could mean a windfall for Oregon, where Democratic Gov. Ted Kulongoski has doggedly sought an 84-cent tobacco tax increase to finance his Healthy Kids program to provide free or subsidized health insurance for low- and moderate-income children in the state.

According to Families USA, a health advocacy group, Oregon would be in line to receive $548.5 million in new federal funds to extend health care coverage to some of the 117,000 children in the state who lack coverage if the SCHIP expansion is approved.

Moreover, the Washington, D.C.-based group said the additional federal money could create 2,444 new jobs in the Beaver State and generate $80.9 million in wage increases.

But the $35 billion expansion proposed by senators is double what the Bush administration is seeking. Moreover, a separate proposal in the House calls for an even larger increase in SCHIP funding"" $50 billion over five years, or 10 times what the president has proposed to bolster the insurance program created as part of the Balanced Budget Act of 1997.

The House Energy and Commerce Committee will consider the House proposal today.

Speaking of the Senate plan, which she called more "politically viable" than the House proposal, Collins said lawmakers ought to "put politics aside" so 6.6 million children in the program don't lose their health coverage.

While the House legislation also hinges on a tobacco tax increase, to 84 cents, it would also relies on cuts in federal Medicare payments for private health plans known as Medicare Advantage Plans, sold by such companies as Humana and UnitedHealth Group, to bankroll the program. Additionally, the House proposal would avert a planned 10 percent cut beginning Jan. — to physicians who care for the nation's 43 million seniors on Medicare.

Supported by the American Association of Retired Persons and the American Medical Association, the proposals set the stage for a showdown between the Democrat-led Congress on one side and Bush, the tobacco industry and insurers on the other.

Sara Wurfel, spokeswoman for the Oregon AARP, in Washington as part of the organization's SCHIP lobbying efforts, said in meetings with members of the state's congressional delegation, lawmakers have been "very responsive" and "seem to be trying to overcome the toxicity" of partisanship, which often besets the nation's Capitol.

"Our top priority is helping to fix parts of the health care system that are broken," Wurfel said in a telephone interview. She added that expanding SCHIP is the "smartest investment" Congress and the president can make to help children.

President Bush is not so sure. Expressing his opposition, Bush said such a dramatic expansion of the State Children's Health Insurance Program would put the United States "down the path to government-run health care for every American."

The White House wants to limit the program to families earning up to 200 percent of the federal poverty level, or $41,300 for a family of four. The Senate proposal, meanwhile, would increase the limit to 300 percent, or about $60,000, in states that get federal approval.

covers government for the Ashland Daily Tidings. You can reach him at

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