Don't Mess With Taxes

A couple of weeks ago, I blogged about the possibility that the White House might consider a credit instead of a deduction when it comes to tax breaks for individual health insurance coverage.

That discussion came up as an ancillary issue to the main medical topic of that day, the State Children’s Health Insurance Program (S-CHIP).

Now the S-CHIP is again taking center stage, as Congressional Democrats are proposing a substantial increase in federal spending for the state administered program so that its services can be expanded to more lower-income children.

And once again, the White House is digging in to fight the effort.

According to a story in today's New York Times, "Administration officials have denounced the Democratic proposal as a step toward government-run health care for all. They said it would speed the erosion of private insurance coverage. And they oppose two of the main ideas contemplated by Democrats to finance expanded coverage for children: an increase in the federal tobacco tax and cuts in Medicare payments to private insurance companies caring for the elderly."

The article also notes the battle lines being drawn by the S-CHIP effort.

While many on Capitol Hill are with Dubya all the way, at the state level, where the program is actually operated, officials -- including at least one prominent GOP governor, Arnold Schwarzenegger -- tend to agree with expansion efforts. Many pharmaceutical companies also are in favor of the additional S-CHIP money, despite Administration requests that the drug companies oppose it.

We should get an indication of which side has the edge when the matter goes to the Senate floor for full debate later this month.