1.    The Democrats’ SCHIP bill would create the most regressive tax increase in American history.

• In order to pay for just 4.5 years of SCHIP and increased spending in Medicaid, H.R. 2 will increase tobacco taxes by more than $71 billion over the next 10 years. The nonpartisan Congressional Research Service calls tobacco taxes “the most regressive of the federal taxes,” meaning that the vast majority of any increases will be on the backs of low-income American families.
• According to the non-partisan Tax Foundation:

“The burden of the proposed cigarette tax hike on the lowest-earning 20 percent of households is 37 times heavier than it would be if the government raised the money with the Federal income tax. Put another way, the proposed cigarette tax hike would hit the poor with the same force as cutting the Earned Income Tax Credit by one-fourth.”

• The Tax Foundation also stated that “no other federal tax hurts the poor more than the cigarette tax.”
• Signing H.R. 2 into law will break President Obama’s campaign promise to the American people not to increase taxes on anyone making under $250,000 per year. If President Obama’s actions match his rhetoric, he will veto this bill because more than 99 percent of the $70 billion in tax increases created by this bill will be paid by people making under $250,000. During the campaign, Obama constantly reiterated his promise not to increase taxes on people making under $250,000 per year, including the following statement from October 27, 2008:
  

“No matter what John McCain may claim, here are the facts. If you make under $250,000 a year, you will not see your taxes increase by a single dime, not your income taxes, not your payroll taxes, not your capital gains taxes – no taxes – because the last thing we should do in this economy is raise taxes on the middle class. And we have been saying that throughout this campaign.”

• Due to the budget gimmick in the Democrats’ bill, either a massive new tax increase would have to be enacted in 2013 or states would be forced to kick off more than 55 percent of the children and pregnant women enrolled in their SCHIP programs.

2.    Since Congress has already reauthorized and fully funded SCHIP through March 31, 2009, we should not allow the Democrats to rush a partisan bill through the legislative process. Instead, we should work in a bipartisan manner to thoughtfully develop a longer-term reauthorization of the State Children’s Health Insurance Program.

• On December 29, 2007, President Bush signed into law S. 2499, a bill introduced by Sen. Baucus (D-MT), the Chairman of the Senate Finance Committee, that reauthorizes and fully funds the SCHIP program until April 2009.

3.    The Democrats’ SCHIP bill enables illegal aliens to fraudulently enroll in Medicaid and SCHIP.

• Section 211 of H.R. 2 severely weakens current law by no longer requiring applicants for Medicaid and SCHIP to present proof of their identity when applying for coverage.
• The Democrats’ SCHIP bill would allow a simple, verbal presentation of any Social Security Number to count as “proof” of U.S. citizenship.
• Disturbingly, this provision does not require that the individual presenting the Social Security Number to document in any way that he or she is actually the person he or she is claiming to be. This is an open door to fraud and abuse.
• As a result of the flaws in this policy, CBO said that Section 211 would lead to $5.1 billion in additional Federal Medicaid spending over the next 10 years, and the already cash-strapped states would have to spend an additional $3.85 billion because of this provision. As a result, Section 211 will leave the American taxpayers with a tab of more than $8.95 billion over the next 10 years.
• Since thousands of U.S. Social Security Numbers are given to non-U.S. citizens ever year and SSNs are stolen electronically every day, this flawed provision in H.R. 2 will prevent the federal government from being able to ensure that taxpayer-funded Medicaid and SCHIP services are only going to qualified individuals.
• Section 211 of H.R. 2 is a major step away from the goals of securing our borders and enforcing our existing immigration laws. It is also important to note that this provision will provide even greater incentives for the theft of Social Security Numbers since they would have even greater value under the Democrats’ proposed policy.
• In 2005, the Health and Human Services Inspector General reported that a State audit in Oregon uncovered that approximately 3 percent of the enrollees in Oregon’s Medicaid program were illegal aliens or other non-qualified aliens. H.R. 2 could lead to a similar or worse situation nationwide, taking billions of dollars away from low-income, uninsured American children.

4.    The Democrats’ SCHIP bill taxes the poor to benefit the rich. The bill uses the funding gained from taxing the poor to pay for expanding SCHIP eligibility to higher-income families.

• In its official analysis of H.R. 2, the Congressional Budget Office projects that 900,000 new children and adults will be added to SCHIP as a result of an “expansion of SCHIP and Medicaid eligibility to new populations.” This means that these people either live in families whose incomes are too high to qualify for the SCHIP program under current law or are currently ineligible due to their citizenship status.
• H.R. 2 will also allow New Jersey to continue to receive full SCHIP reimbursements for families with incomes up to 350 percent of the Federal Poverty Level, which is currently $74,200 for a family of four and $86,800 for a family of five.
• According to CRS, the language in H.R. 2 will also allow states to increase their upper income eligibility level to any level they choose as long as they assign a purpose to their new income disregard. Last Congress, Energy and Commerce Committee Chairman John Dingell admitted on the floor that the Democrats’ SCHIP bill will allow states to expand income eligibility to families with annual incomes in excess of $100,000.

5.    The Democrats’ SCHIP bill spends billions of dollars to substitute private health insurance coverage with government-run healthcare coverage.

• CBO projects that 50 percent of the 900,000 new enrollees in the “expansion of SCHIP and Medicaid eligibility to new populations” category already have private health insurance coverage. This means that the American taxpayers will be paying for the government to simply take over the health insurance premiums of these middle and upper-income families. This has absolutely nothing to do with actually enrolling low-income, uninsured kids.
• Instead of the Democrats’ flawed bill, we should pass bipartisan legislation that helps families and children keep their current health insurance coverage rather than replacing it with an inferior government-run program.

6.    The Democrats’ SCHIP bill focuses on enrolling higher-income kids instead of low-income, uninsured kids.

• Instead of focusing on uninsured, low-income children, CBO says that H.R. 2 will actually enroll a greater number of currently ineligible adults and children in SCHIP than currently SCHIP-eligible children.
• Shouldn’t SCHIP be focused on insuring low-income kids, not people who can already afford to pay for their own health-insurance premiums?
• Instead of the Democrats’ flawed bill, we should pass legislation that focuses first on ensuring that low-income kids have coverage rather than leaving them behind in favor of kids from wealthier families.
  
  

7.    The Democrats’ SCHIP bill could significantly increase the number of adults on SCHIP or some new, SCHIP-like coverage scheme that uses the same funding source as the SCHIP program, allowing even more resources to be taken away from low-income, uninsured kids.

• There were 700,596 adults enrolled in SCHIP at some point in FY2006, and CBO projects that up to 1,424,000 adults could be enrolled on SCHIP during FY2013. Shouldn’t we be trying to reduce the number of adults on SCHIP?
• According to CRS, it costs States about twice as much to cover an adult in SCHIP than it does to cover a child, and since SCHIP funding is based on fixed annual allotments, every adult that a state covers is preventing that State from being able to cover two low-income, uninsured children.
• In FY2008, states spent $7.6 billion in federal funds on SCHIP. Of this amount, more than $850 million (over 11 percent) was spent on adults (not including pregnant women).

8.    States simply cannot afford H.R. 2.

• With H.R. 1, the Democrats’ “economic stimulus” bill, the House of Representatives voted to give the States an additional $100 billion in Medicaid funding because the governors claimed that they could not afford the financial obligations of their current SCHIP and Medicaid programs. However, States will have to spend over $50 billion to fully implement H.R. 2.
• If states cannot afford their current SCHIP and Medicaid programs, then why is Congress attempting to drastically increase the costs of these programs?

9.    H.R. 2 will spend $6.5 billion of taxpayer funds to allow currently ineligible immigrants to receive federal SCHIP and Medicaid benefits.

• H.R. 2 removes the five-year waiting period in current law that new legal permanent residents have to wait before enrolling in Medicaid or SCHIP. This requirement was made a part of the Personal Responsibility and Work Opportunity Reconciliation Act because of concerns about foreign nationals coming to the U.S. solely for the purpose of enrolling in federally funded public assistance programs instead of actively searching for gainful employment and actively contributing to the American economy.
• This provision in H.R. 2 is not necessary because, under current law, legal permanent residents are required to have a sponsor in the U.S. who is required to pay for their healthcare services if they are unable to pay. Also, States can use their own funds to provide healthcare coverage to new legal permanent residents. This is just another example of an irresponsible bailout put forth by the Democrats in Congress.