Congress Approves FY 2008 Budget Resolution With Additional $50B for SCHIP Expansion

The Senate on Thursday voted 52-40 to adopt a final $2.9 trillion fiscal year 2008 budget resolution, which includes an additional $50 billion to expand SCHIP, after the House voted 214-209 to approve the budget resolution, the AP/Atlanta Journal-Constitution reports (Taylor, AP/Atlanta Journal-Constitution, 5/18). Senate and House negotiators on Wednesday announced an agreement on the budget resolution, which includes $21 billion more for domestic discretionary spending than President Bush has requested (Kaiser Daily Health Policy Report, 5/17).

Two Senate Republicans, Susan Collins (Maine) and Olympia Snowe (Maine), voted in favor of the budget resolution (Dennis, Roll Call, 5/17). No House Republicans voted in favor of the budget resolution (AP/Atlanta Journal-Constitution, 5/18). Thirteen House Democrats voted against the budget resolution (Roll Call, 5/17).

The budget resolution includes 23 "reserve funds" to provide additional funds for SCHIP, health care for veterans and other domestic programs (Cohn [1], CongressDaily, 5/18). In addition, the budget resolution would restore pay-as-you-go rules last in effect in 2001 that would prohibit tax cuts or spending increases to entitlement programs without offsets in other areas in the budget. However, the rules "may be waived when Democrats this year renew" SCHIP, the AP/Journal-Constitution reports (AP/Atlanta Journal-Constitution, 5/18).

Comments
House Speaker Nancy Pelosi (D-Calif.) said, "In the past several years under Republican leadership, the budgets have been bloated and stale in their thinking. Today, we have a budget that is lean and fresh in its thinking." Senate Appropriations Committee Chair Robert Byrd (D-W.Va.) said, "The American people expect and deserve a government that is responsive to their needs and that also lives within its means. This is exactly what we intend to deliver" (Cohn [1], CongressDaily, 5/18).

Senate Budget Committee ranking member Judd Gregg (R-N.H.) said, "There is absolutely no attempt to address the entitlement crisis that we're facing -- the fact that our children and our children's children are going to have to pay a cost, which they simply will not be able to afford" (AP/Washington Times, 5/18).

More on SCHIP
The budget resolution does not specify offsets for the $50 billion reserve fund for an expansion of SCHIP, and Senate Finance Committee Chair Max Baucus (D-Mont.) "hasn't elaborated," CQ HealthBeat reports (Reichard, CQ HealthBeat, 5/17).

The Senate version of the budget resolution passed on March 23 included a provision that would increase the federal tobacco tax by 61 cents per pack to raise $35 billion for an expansion of SCHIP. In addition, that version of the budget resolution included a provision that would use $10 billion from reserve funds and $5 billion from surplus funds in FY 2012 for an expansion of SCHIP. However, the final version of the budget resolution does not include either of the provisions (Kaiser Daily Health Policy Report, 5/17). Baucus said, "Everything is on the table" as potential offsets, such as an increase in the federal tobacco tax or reductions in reimbursements to private Medicare Advantage plans.

According to CQ HealthBeat, "there's considerable skepticism about whether Baucus can get the job done because of the political power of health care lobbies facing potential cuts, including those representing private health plans in Medicare and hospitals." In addition, one state health care policy analyst said Bush likely would veto an expansion of SCHIP that required increases in taxes and reductions in Medicare reimbursements. Senate Democratic aides said, "It's absolutely going to be hard, but it's absolutely doable," adding, "There will be good policy options to get the $50 billion" (CQ HealthBeat, 5/17).

Supplemental Appropriations Bill
In other budget news, the Senate on Thursday voted 94-1 to approve a "placeholder" supplemental appropriations bill (HR 2206) for military operations in Iraq and Afghanistan, "paving the way for a conference committee to wrap up next week," CongressDaily reports (Schneider/Kivlan, CongressDaily, 5/17).

Bush on May 1 vetoed an earlier version of the bill because of opposition to provisions that called for the withdrawal of most U.S. troops from Iraq by March 2008, as well as the inclusion of funds for nonmilitary programs. The House on May 2 failed to override the veto. The House on Thursday voted 221-205 to approve a $124.2 billion version of the bill that includes funds for SCHIP, health care for veterans and flu pandemic preparedness. (Kaiser Daily Health Policy Report, 5/11). The House version of the bill exceeds the amount that Bush has requested by $21 billion (Cohn [2], CongressDaily, 5/18).

The Senate version of the bill, which includes no funds, incorporates the language of a resolution that the Senate voted 96-2 to approve in March. The resolution, drafted by Sen. Patty Murray (D-Wash.), expresses the "sense of the Senate that Congress should not take steps to undermine the safety of the armed forces," CQ Today reports (Higa, CQ Today, 5/17).

After the vote, Senate Majority Leader Harry Reid (D-Nev.) appointed conferees for final negotiations on the bill. Senate conferees include Reid, Minority Leader Mitch McConnell (R-Ky.), Byrd, Appropriations Committee ranking member Thad Cochran (R-Miss.) and Appropriations Defense Subcommittee Chair Daniel Inouye (D-Hawaii). Bush likely will ask that conferees eliminate "at least a portion" of the funds for nonmilitary programs from the final bill, CongressDaily reports (Cohn [2], CongressDaily, 5/18).