Jul
21
The US Senate Finance Committee has approved, voting with an overwhelming majority of 17 to 4, in defiance of a threatened veto by President Bush, a bill to increase the tobacco tax significantly, in order to expand child healthcare. Morever, it appears that most of the Republicans on the Committee joined the Democrats, voting in favour of the bill.
The current legislation for the State Children’s Health Insurance Program, SCHIP, expires at the end of September this year.
If passed by Congress, the new bill would entitle another 3.2 million children from low income families to receive state funded health insurance, bringing the total to 10 million children. Typically, these families can’t afford medical insurance and ironically don’t qualify for Medicaid because their earnings are just above the cut off point.
President Bush has stated that he is against the bill because it expands the government’s role in healthcare and is financed by a huge tax increase, and he instead favours a system of tax breaks to encourage uninsured people to take up private insurance.
The original proposal in the Senate Committee by the Democrats was for a 50 billion increase, the 35 billion approved by the Finance Committee was a compromise. However, some Democrats are adamant about pursuing the original 50 billion, and others realise that to do this may compromise support for the bill because many Republican Senators will find it difficult to support a bill that would spend significantly more what the Finance Committee approved.
The Senate panel voted to provide an additional 35 billion dollars to finance the expanded program, bringing the total spend to 60 billion over the next five years. President Bush’s counterproposed a 5 billion increase to continue the program without expansion, with a total spend of 30 billion over five years.
A New York Times report quoted Republican Senator Charles E Grassley of Iowa, co-author of the bill calling Bush’s plan “unrealistic” and he couldn’t see how only a 5 billion dollar increase in funding would allow SCHIP to continue doing what it has been doing.
The committee approved bill calls for a considerable rise in tobacco tax to pay for it. The tax on a standard pack of cigarettes would increase from the current 39 cents to a dollar. Cigars would face a bigger increase, with premium cigars facing an increase in tax from 5 cents being taxed at 10 dollars each.
Senators in favour of the bill said the tobacco tax would also discourage smoking, particularly among teenagers..
According to a report by Reuters, Senate Majority Leader, Harry Reid, a Nevada Democrat, said the Senate would approve the bill later this month in defiance of Bush’s threat to veto it.
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