This vote was on whether to kill an amendment by Jim Bunning, R-Ky., that would prohibit New York and New Jersey using federal State Children’s Health Insurance Program (SCHIP) funds to cover families with incomes 300 percent above the federal poverty level.   The SCHIP program – funded primarily through taxes on tobacco products -- helps low income families with children afford health insurance, and currently covers about 6 million kids.

The amendment was offered to a bill that would reauthorize SCHIP and expand the program’s funding by about $35 billion over the life of the bill.  To offset the cost of expansion, the bill would increase the federal tax on cigarettes by 61 cents, to $1 per pack.  The program is intended to be a health insurance safety net for poor children, but states have been given significant flexibility to design their own benefit packages, within certain guidelines.  The SCHIP program also allows states to petition the Department of Health and Human Services for waivers of certain SCHIP rules.  Many states have asked for waivers to use SCHIP funds to provide health coverage to very poor adults as well as children, or to cover children from families whose incomes are more robust than SCHIP would otherwise allow.

Bunning’s amendment would prohibit a waiver sought by New York and New Jersey that would allow federal SCHIP money to be used to cover families whose incomes are 300 to 350 percent above the federal poverty level.  Bunning said this would allow families making $72,000 to $82,000 per year to qualify for coverage.

“Why should people in every other State subsidize Government health care for families in New York and New Jersey at these higher incomes? My amendment does not kick kids off SCHIP. The State can still cover them at their Medicaid matching rate. It is the State’s choice. If people in these two States think this is a priority, then they should be willing to pay more for this type of benefit,” Bunning said.

Frank Lautenberg, D-N.J., suggested these numbers are misleading, because the cost of living and cost of health care in New Jersey is so high.  He added that New Jersey often subsidizes other states when it comes to the amount of federal taxes it contributes, across all types of spending.  Lautenberg said for every dollar New Jersey contributes to the federal government in taxes, it receives back 55 cents from federal spending programs.
“The Bush administration has recognized the higher costs in New Jersey and explicitly granted our State the right to provide health care to children at the level it currently does. New Jersey is not trying to beat the system or get health coverage for its children in a way that is unfair to other States—not at all. The State of New Jersey is legitimately trying to provide health insurance to children, recognizing the distinct economic characteristics of our State,” Lautenberg said.

Max Baucus, D-Mont., moved that the Senate table (or kill) Bunning’s amendment.  By a vote of 53-43, the Senate voted to table the amendment.  Every Democrat present voted to kill the amendment.  All but four Republicans present voted to preserve the amendment (Pete Domenici of New Mexico, Olympia Snowe of Maine, Orrin Hatch of Utah, and Chuck Grassley of Iowa).  The end result is that Bunning’s amendment was killed, and the bill went forward without additional strictures on SCHIP programs for New York and New Jersey.