Bookmark and Share

April 2007

Update on Federal Activities

The 2008 Federal Budget: Following President George W. Bush’s 2007 State of the Union address, the Administration submitted its 2008 fiscal year budget request to Congress. The request would cut $76 billion over five years from Medicare and $25 billion over five years from the Medicaid program. The budget proposal received a lukewarm reception from the new Democratic leadership in Congress.

Both the House of Representatives and the Senate passed their own versions of the budget resolution that rebuffed President Bush’s budget cuts. The budget resolution is a non-binding framework that sets overall spending and provides instructions to committees on spending targets for the next fiscal year. Since the House of Representatives and the Senate passed different versions, a conference committee will convene to create a single budget resolution for both houses of Congress.

The State Children’s Health Insurance Program (SCHIP): In both the Senate (S. Con. Res. 21) and the House of Representatives (H. Con. Res. 99) versions of the budget resolution, lawmakers make reauthorization of SCHIP a priority and include instructions to the committees of jurisdiction to provide SCHIP with a reserve fund of $50 billion. A reserve fund is a budget placeholder. It is important to note that SCHIP reauthorization and possible expansion cannot be accomplished using the budget reconciliation process. In order for SCHIP to be reauthorized, the program requires reauthorizing legislation and an appropriation.

In addition to the budget resolution, there is considerable legislative momentum in Congress to reauthorize and improve SCHIP. For example, House Energy and Commerce Committee Chairman Dingell (D-Mich.) introduced legislation that would expand SCHIP and allow states to cover children below 400 percent of the federal poverty level (FPL). In addition, the bill creates additional financial incentives for states to expand coverage and alters the SCHIP allotment formula that takes into account health care cost inflation and enrollment increases.