From the Wall Street Journal, Sept 28.
“Simply on the basis of fiscal responsibility, opposing Schip is a no-brainer. On paper, the bill expands Schip by $35 billion over the next five years, to a total of $60 billion, well beyond the 20% expansion supported by the Bush Administration. To fill this pot of federal dollars, the Democrats will raise the cigarette excise tax by 61 cents.
“Naturally, however, there’s a budget sleight-of-hand. Known as a “funding cliff,” the yearly Schip layout increases to $13.9 billion in 2011, then abruptly cuts spending by 65% below current funding levels. This helps “score” the bill as costing only $35 billion over the five-year budget window, but it also means that come 2012 Congress will either have to pass new spending or kick kids off the rolls. The chances of the latter happening are approximately zero, and GOP Senators Chuck Grassley and Orrin Hatch should be embarrassed for going along with this confidence trick.
“More broadly, Schip is designed as a ratchet that jacks up the government’s share of health-care spending, and every time it grows it steals customers from private insurance. All the more so because states have been raising eligibility levels above the 200% of the federal poverty line that Schip was intended to serve. The Democratic bill raises the effective national level to 300%, and it overrules a sensible Bush Administration directive that states enroll low-income families before subsidizing the middle class.
SCHIP is talked about as a $35 billion dollar program. That is just the increase. A 140% increase, if my calculation are correct. It will be a $60 billion program. Now, look at the second paragraph. ‘…budget slight of hand’. The $35 billion number is phoney! I guess I could make blanket statements about trusting the Congress but specifically regarding this bill, when it is obvious that they are fudging the numbers, why should we trust them.
Now look to the third paragraph. The logic of other current arguments (vouchers) is an opposition to the redistribution of wealth. Yet clearly that is what this incarnation of SCHIP is about. The Peter principle lives on in government programs-a reasonable, competent idea will bloat to the level of just another expensive, mismanaged government bureaucracy.
Vouchers are a redistribution of already redistributed wealth, so they cancel each other out. In other words, that can’t be anything other than a moot point.
SCHIP, as you (and WSJ) have clearly described, is a train wreck waiting to happen. Just like Medicare and Medicaid (let’s throw in Social Security just for good measure) government’s attempt to solve the health care crisis is ironic. Government IS (largely) the health care crisis.
David,
Thanks so much for this post. Excellent analysis. We’re definately going to bring this up on Monday night.
Frank,
You’re right, it does cancel out. However, the distinction is still relevent because so many proponents refer to the voucher as “my money”. It’s not. It’s redistribution- even if the redistribution originates with the weighted pupil unit.
If we want a system where voters can refer to “my money” then we should opt for a tuition tax credit.
Being Orrin means being above embarrassment and never having to say you’re sorry.