Congress is preparing to go home for the holidays having delivered a historic tax cut for corporations — and having done only the absolute minimum to stave off disaster for the Children’s Health Insurance Program.
The government spending bill released on Thursday, which Republican leadership hopes to pass in a matter of hours, would provide $2.8 billion that is supposed to fund the program through March.
It would prevent an impending disaster — nearly 2 million kids could lose coverage in January without congressional action — but it is a long way from the five-year extension CHIP advocates are seeking and that Congress has been sitting on for three months.
“It’s better than nothing, but the program will sputter along without the certainty it needs for states to feel confident enough to do outreach and put out the welcome mat for children,” Joan Alker, executive director of Georgetown University’s Center for Children and Families, told me Thursday morning.
She added of the preferred five-year extension: “Why not do that instead and do right by kids for the holidays? It is troubling that they can’t get this done when they have had bipartisan agreement on the policy for months now.”
In a matter of days, at least two states — Alabama and Connecticut — would stop enrolling new children in the program. Real negative impacts will be felt by some number of children across the country the longer Congress fails to act. This would be an unprecedented breach of trust for this program that everybody seems to agree is good and should be funded.
“Our phones are ringing off the wall,” Alabama CHIP director Cathy Caldwell told reporters this week. “We have panicked families wondering what in the world they have as options.”
It would cost a mere $8 billion for Congress to extend the program, which covers 9 million American children, for the next five years. There is bipartisan support for the program. There is a working plan to do it, which the House already passed. There is no discernible reason that CHIP has been left unfunded for nearly 90 days or that families are starting to receive letters warning them that their coverage could soon end.
Except the Republican majorities in Congress didn’t make it a priority.
Don’t get it wrong: Republicans do generally support CHIP. Sen. Orrin Hatch (R-UT) helped write the law. He wants its funding extended. So do most of his colleagues. But they have limited time on their hands. They chose to pursue other priorities — first, a last-ditch effort to repeal Obamacare, then a major tax overhaul centered on a massive corporate tax cut — instead of funding CHIP.
Instead, Congress is scrambling mere days before states would start freezing CHIP enrollment. Their gambit will depend on Republicans actually managing to pass this spending bill.
For people working on CHIP, the damage is, in a sense, already done. The program’s reputation could take years to recover from the uncertainty sown over the past three months.
“This may go down as the worst year for children in Congress in decades,” Bruce Lesley, president of First Focus, told me.
Funding CHIP is a pittance next to the Republican tax cuts
On its face, it’s remarkable that Congress hasn’t yet found the money to extend CHIP for five years and take this headache away from them and the program’s families.
CHIP costs about $12 billion to $14 billion each year. But because the Congressional Budget Office assumes the program will remain indefinitely, even if it hasn’t been funded yet, it technically only “costs” about $8 billion to extend CHIP for five years. (This is wonky congressional budget math, but that’s how it shakes out.)
That is a minimal lift. Republicans just passed a $1 trillion corporate tax cut.
(A quick note on the tax bill’s child tax credit: Republicans have expanded it, but in such a way that the poorest families will see a minimal benefit. The bigger benefits will go to families with higher incomes.)
So Congress needs to find $8 billion in spending cuts (or new revenue) to fund CHIP for five years and erase any risk that a kid in the United States would be denied or lose health insurance. They had no problem approving a tax bill projected to balloon the federal deficit by $1 trillion over the next 10 years. Extending CHIP should be no problem. But it’s still not done.
The House did pass a CHIP extension in early November, almost entirely with Republican votes (though 15 Democrats also backed the bill). But it has been hampered — and likely isn’t viable in the Senate, where Democratic votes will be needed — by the spending cuts that Republicans chose to include.
The House paid for its CHIP funding by cutting Obamacare’s public health fund, by increasing premiums for higher-earning Medicare enrollees, and by shortening the grace period (to one month) for Obamacare enrollees who fail to pay their premiums. The left-leaning Center on Budget and Policy Priorities estimates that last provision would lead to nearly 700,000 Americans losing health insurance.
That legislation also still came nearly a month after CHIP’s funding had technically expired. Congress hasn’t since found the time to work out a long-term deal that would actually extend the program for good and could actually pass the Senate and be sent to President Trump’s desk.
But they did find time to rush a massive tax overhaul through the House and Senate in less than two months.
Republicans prioritized Obamacare repeal and tax cuts over CHIP
Let’s go back to mid-September, before CHIP’s funding had expired on October 1 and when advocates were warning Congress not to let the program lapse. It was already too late, even then, in their eyes.
"This is ridiculous," Alker said in September. "We have never had a situation like this before."
There was a deal, in principle, to extend the program for five years. Sens. Hatch and Ron Wyden (D-OR) had announced an agreement, though they still needed to work out some details, like how exactly to pay for it.
But around that same time, momentum for a last-ditch Obamacare repeal plan, Graham-Cassidy, was picking up. Senate Republican leaders devoted their next two weeks to whipping support for the plan, rushing to beat a September 30 deadline for the special “budget reconciliation” privileges they were using to advance the plan.
They ultimately came up short, but Graham-Cassidy had effectively consumed the second half of September and CHIP’s funding was allowed to lapse at the end of the month.
Shortly thereafter, the House introduced its bill. It wasn’t smooth sailing, of course, because of the pretty explicitly partisan offsets included in the plan. It didn’t pass until a month later and was always likely dead on arrival in the Senate.
Otherwise, the work has been more or less on hold — but Republicans have managed to muscle through a generational tax overhaul in less than two months, when the last major tax reform bill, in 1986, took two years to produce.
They gleefully promised to deliver a big, beautiful tax cut for Christmas. And they did it. They made time to approve a record number of federal judges. They had time for their holiday parties, hosted by Washington lobbyists.
But Congress will leave town having done the absolute bare minimum to prevent an unprecedented disaster for CHIP. The funding that they are hoping to pass Thursday might not even last as long as they’d like — Lesley noted to me that $2.8 billion for a $12 billion-a-year program doesn’t seem like it would cover six months.
This year, Congress made sure that it worked for corporations. The 9 million children covered by CHIP were left to pick up the scraps.