POLITICS: Forgotten children and unopened bills By Eric Novack

On October 18th, the US House of Representatives will try to override the President’s veto of a greatly expanded State Children’s Health Insurance Program (SCHIP).  As is so often the case, political rhetoric serves as a fog that obscures what the SCHIP legislation really is and who is most affected.

The Democrats believe that they win by losing. Republicans shout “socialized medicine”.

But the Democrats went even lower this past week by bringing out a 12 year old boy and his family to be the ‘poster child’ for SCHIP expansion.

Nancy Pelosi is incensed and explains- by accident- why they chose a
12 year old to headline the program: “I think it’s a sad statement
about how bankrupt some of these people are in their arguments against
SCHIP that they attack a 12-year-old.”  In other words, how dare anyone
question what we are doing?    

Republicans could be focused on the fact that the program has almost
ZERO funding after the first 5 years. Republicans could be focused on
the hundreds of millions of dollars that are given to favored hospitals
in certain legislative districts around the country.  But they cannot
and do not because both parties are equally guilty of promoting
policies and spending that are more at home at the gambling table than
at the dinner table.   

Government spending on the proposed SCHIP expansion violates a very
simple principle stated by philosopher/ economist Adam Smith over 200
years ago: “what is prudence in the conduct of every private family,
can scarce be folly in that of a great kingdom.” 

In other words, wildly spending on a credit card you cannot ever repay
is just as destructive for you personally as it is for the country as a
whole.  But back to the 12 year old boy who has been marched out to
show who benefits from the expanded SCHIP program.

Instead of attacking his family personally, which rings hollow and just
plain mean to most Americans, opponents ought to bring out the children
living in poverty who might really go hungry or cold because of the
$222 per year tax that was just added to their single parent who
happens to smoke a pack per day. What do you mean?  Remember that the
program is partly financed with a 61 cent per pack cigarette tax—a tax
that disproportionately impacts low income adults. 

I suspect that most Americans would suddenly be less inclined to
support the SCHIP expansion when they see several children negatively
affected for every 1 child helped. However, given that most government
programs ignore both “the children” and common sense financial
planning, we are likely to see the SCHIP debate played out with them
tucked away and forgotten.

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Zagreus AmmonGingerBtcoyotePetereric Novack Recent comment authors
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Zagreus Ammon

You know, the arguments against funding an SCHIP expansion using a cigarette tax are the stupidest and most morally bankrupt I have ever heard. Enough all ready. It’s crap. Call it.
In fact, parsimonious regulation using subtle and natural market incentives is exactly what the Republicans would want had they not lost their moral compass.
The real problem is that smoking is declining overall and any funding mechanism based on a cigarette tax is not a long-term solution.
Please, put the party dogma away and argue with logic and integrity.


“I would prefer to see reform in the insurance market and a mandate to obtain coverage. I doubt that family pays much in taxes, and would favor a credit or premium subsidy to encourage them to obtain coverage.” Certainly that’s what the insurance industry sees as a solution protecting their profits. And of course it protects profits of providers as well. That 20% of GDP gets closer and closer. “In a telephone interview, the Frosts said they had recently been rejected by three private insurance companies because of pre-existing medical conditions.” If this is true then we can see another… Read more »


I read the articles about the Baltimore family and think it’s an excellent example of how gov’t incentives drive the decisions families make. Property is favored under our tax code, so our not very well off family owns some. Insurance is difficult to buy if you don’t get it through an employer — so our family skipped that. With six people, even with a small mortgage, $40-50K a year does not go far. Even a cheap policy of 300-500 a month would be a stretch, particularly if they exclude existing problems which you’d still have to pay for. Insuring children… Read more »


Neither side of the SCHIP fight wanted to enact the legislation; they were playing to their bases and positioning for next year’s campaign. The Democrats went out of their way to craft a bill Bush was sure to veto- from funding it w/ a tax increase instead of spending cuts, hiding the outyear costs and larding it up with favors (rural Wisconsin hospitals suddenly part of Chicago for higher Medicare payments, a bailout for ProCrit- previously discussed in this blog, etc.) They created a bill Bush could not sign to force Republican Congressmen they want to defeat next year to… Read more »


Eric, I’m a little confused by your post. Are you in favor of a tax to FULLY fund SCHIP as an act of fiscal responsibility or are you against SCHIP expansion? Would you be in favor of a tax to fully fund the Iraq War and the coming war with Iran? Would you be in favor of a tax to fight global warming? Here’s some background on that 12 year old boy and his family from the NY Times. “The critics accused Graeme’s father, Halsey, a self-employed woodworker, of choosing not to provide insurance for his family of six, even… Read more »

Barry Carol
Barry Carol

Eric, I think both parties have a lot to answer for on the fiscal responsibility front. While I haven’t studied the bill in detail, from what I’ve read about it, I thought the veto was appropriate, though Bush’s original proposal was inadequate. Like I said in my original comment, I think funding should be sufficient to cover children in families up to 300% of the FPL. Children with significant health issues whose parents earn above 300% of the FPL should be dealt with by improving the state high risk pools. States that want to extend subsidies beyond 300% of the… Read more »

eric Novack
eric Novack

barry- so you are against the bill as passed by Congress and vetoed by the President?
SCHIP has limited funding as it is proposed— the funding drops 90% in year 6— which of course will never happen in a presidential election year… thus my point that fiscal responsibility from both parties is nearly equally lacking.

Barry Carol
Barry Carol

Sorry Eric, but I think the increase in the cigarette tax is warranted for two reasons. First, the well established harmful health effects of smoking suggest that it is good public policy to tax cigarettes at a high rate so their price more fully reflects the full social cost of producing them. Second, perhaps the higher price will be the catalyst that finally drives smokers (especially low income smokers) to quit smoking. If everyone quit and drove cigarette tax collections to zero, that would be a great outcome even if we have to look to other taxes to replace the… Read more »