Bush Budget Gives States Little to Cheer About


Reversing course from last year, the Bush administration announced Monday (Feb. 4) it plans to spend an additional $19.7 billion over five years to see that more of America's children have health insurance.

But the new budget proposed by the president would impose several new restrictions on the State Children's Health Insurance Program (SCHIP), which currently covers 6 million Americans a year. That could mean headaches for states that have aggressively used the program to provide subsidized health insurance to middle-class families.

President Bush's $3 trillion fiscal 2009 budget comes at a time when many states face a budget shortfall. Unlike the federal government, states must balance their budgets each year.

Bush plans to ask Congress to limit SCHIP to families of four making less than $53,000 a year. His proposal would grandfather in already-enrolled kids in families making more than that level, but states couldn't sign up anyone else beyond that level.

SCHIP was at the center of a fight between Bush and Congress last year. Congress, led by Democrats, twice passed legislation that would have expanded SCHIP to 4 million new children and cost an additional $35 billion over five years. Bush vetoed both efforts, saying the program only needed an extra $5 billion.

Eventually, both sides agreed to extend the program for another 18 months without any major expansions.

Bush's budget also calls for controversial changes in Medicaid, the state-federal health insurance program for the poor. One would eliminate a requirement that drug companies sell their medicine to Medicaid at the cheapest price on the market.

The budget includes $110 million to help states comply with the 2005 Real ID Act, which will cost an estimated $4 billion to create tougher national standards for driver's licenses. The president's proposal includes $50 million to develop an electronic information hub connecting databases of Social Security numbers, birth records and immigration status, among others. Bush included no new money to help states with Real ID in last year's budget proposal.

Bush's $59.2 billion proposal for education - nearly equaling the money spent last year - is unlikely to jump-start talks on his stalled signature education initiative, the No Child Left Behind Act of 2001. NCLB was up for renewal last year, but Bush and the Democratic-controlled Congress fought over several points, including Congress' contention that the president has not adequately funded the law.

Here are other elements of Bush's budget proposal:

  • Education - $300 million for a new Pell Grants for Kids program that would let students at low-performing schools attend another public or private school. U.S. House Education and Labor Committee Chairman George Miller (D-Calif.) said Feb.4 that Congress has rejected past voucher programs and would reject this one as well.
  • Energy - Aid to help states pay the heating bills of poor families would be cut 22 percent, from $2.57 billion to $2 billion, under the president's proposal. Congressional leaders are expected to push for more funds, as the number of families receiving help under the Low Income Home Energy Assistance Program has increased more than 25 percent over the last four years.
  • Immigration - $100 million to expand a federal database, called "E-Verify," that allows employers to check the legal status of their employees, a $40 million increase. At least eight states require state contractors to consult the database, which is now being used by 50,000 firms nationwide. More than 100,000 firms are expected to use the database by year's end, Homeland Security Secretary Michael Chertoff said Monday.
  • Transportation - To fill a $3.2 billion gap in highway funding, Bush wants to borrow money from a mass transit account that is projected to have a $4.4 billion surplus. The highway trust fund, which pays for about 45 percent of the nation's road-building, comes almost entirely from the federal tax of 18.3 cents on each gallon of gas. But the tax has not been raised since 1993, and spending from the trust fund is expected to surpass revenues next year.
  • Welfare - Child-care assistance for poor families would be frozen for the seventh consecutive year. The administration says the 2009 funding level would cover 200,000 fewer children than in 2007.
  • Justice - Angering state and local law enforcement officials, Bush did not propose any funding for the popular Edward Byrne Memorial Justice Assistance Grant Program. The grants, which help states and cities pay for anti-crime initiatives such as drug task forces and police overtime, are allocated based on population figures and crime rates.

Stateline.org staff writers John Gramlich, Eric Kelderman, Pauline Vu, Chris Vestal and interns Victoria Ekstrom and Kim Mendelsohn contributed to this report.


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