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Prospects dim for popular health bill

Congress's bid to renew a program for poor children revives debate over healthcare.

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A modest attempt to renew a popular program that helps poor children get access to insurance is unexpectedly becoming a proxy for the next big battle over who pays for American healthcare.

In a legislative season distinguished by rancor and gridlock, the bid to renew the State Children's Health Insurance Program, or SCHIP, could have been the exception.

Most lawmakers agreed with the principle: to help states expand health insurance coverage to poor children. And, seven months into the 110th Congress, both the White House and the Democrats now controlling Capitol Hill need a domestic accomplishment.

A new version of the legislation, set to expire on Sept. 30, was voted out of the Senate Finance Committee on Thursday with a 17-to-4 vote, but it faces a veto threat from President Bush.

The $35 billion, bipartisan plan aims to bring an additional 3.3 million children into the SCHIP program over the next five years. To pay for it, senators propose increasing the federal tax on a pack of cigarettes from 39 cents to $1 and a jump in the tax on cigars from 5 cents to up to $10.

The White House proposed $5 billion to fund a reauthorization of the SCHIP program. Mr. Bush calls the proposed Senate bill a massive expansion of government healthcare.

It would cause people to drop their private insurance to join a federal program, he told businessmen in Maryland this week. Instead, Congress should reform the tax code to make private health insurance more affordable for all Americans.

"That's the divide. The debate between these two options is now beginning to play out on Capitol Hill" with the SCHIP debate, Bush said after meeting with healthcare experts in the White House last month.

Sen. Max Baucus (D) of Montana, who chairs the Senate Finance Committee, on Wednesday called on the White House to drop its veto threat.

"The administration appears to be holding children's health insurance hostage to Congress's adoption of the ... larger health-insurance tax and other health-reform proposals," he wrote in a letter to Health and Human Services Secretary Michael Leavitt. "Regardless of the merits of the administration's tax proposal, it has proved far too controversial a matter for the Congress to adopt this year."

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