I've been fairly mystified by the Bush administration's decision to push so hard against the SCHIP bill wending its way through Congress. To be sure, it's not a good bill. The main idea seems to be that we should expand a program aimed at poor children to cover more adults and middle class kids--and pay for it with a highly regressive tobacco tax. It's especially awful from a party trying to reclaim the mantle of fiscal responsibility, since one of the prime effects of tobacco taxes is to reduce smoking, which means that this program's funding stream is self-defeating, and will undoubtedly require more money from general revenues. But is this the hill the Bush administration really wants to die on? Regardless of the underlying merits of the case, it is squandering what little political capital it had left, and positioning Republicans as the party that hates poor kids.
Now Greg Mankiw posts a defense of the veto from inside the White House--and I still don't get it. The administration seems to feel that this is the camel's nose under the tent for some sort of universal government run program, a fear to which I am sympathetic. If poor kids lose their coverage, won't this give the pro-single-payer forces a lot of photogenically unhealthy kids to campaign with next year? That seems like a bigger danger than having New York State cover some portion of health expenses for families up to 400% of the poverty line--particularly since the problems in the financial markets may well damage New York State's revenue stream, and thus its appetite for expensive experiments.
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