About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

221 IRET Congressional Advisory 1 (2007)

handle is hein.taxfoundation/iretcgadv0218 and id is 1 raw text is: INSTITUTE FOR RESEARCH ON THE ECONOMICS OF TAXATION IRET is a non-profit 501 (c)(3) economic policy research and educational organization devoted to informing the public about policies thait will promote growth and efficient operation of the market economy. March 22, 2007 Advisory No. 221 SCHIP FUNDING UP IN SMOKE? - TOBACCO TAXES NOT THE WAY TO FUND CHILDREN'S HEALTH INSURANCE During the Budget Resolution debate this week, Senator Gordon Smith (R-OR) is expected to offer an amendment to raise the federal tobacco products tax, which could boost the tax on cigarettes from $0.39 a pack to as much as $1 a pack. The added revenue would be intended for an expansion of the Schip program (State Children's Health Insurance Program). Schip provides federal money to assist the states in providing health insurance for children in families that are of modest income but too well-off to qualify for Medicaid. The budget baseline includes an expected renewal of the Schip program at previous levels of coverage, about $25 billion over 5 years. However, many Senators want to expand the program. Budget Committee Chairman Senator Kent Conrad (D-ND) has included a reserve fund for Schip, suggesting that an additional $50 billion over five years be authorized to cover an additional 8.3 million children (about $1,200 per child). It would bring the total federal aid to $75 billion, but only if offsets are found. Senator Smith's amendment suggests that a tobacco tax increase could be used as an offset. Under the Senate Paygo rules, any proposed expansion of an entitlement or reduction in baseline revenues must be matched by a cut in another entitlement or a tax hike, even if the program expansion or revenue reduction was authorized in the Budget Resolution. If not, the proposal is subject to a point of order and would require a 60-vote super majority to be adopted. Trimming discretionary spending is not a recognized offset. Conversely, if an offset for a program expansion or a tax reduction is found, then the program or tax cut does not have to have been mentioned in the Budget Resolution to be in order. Any such language in the Budget Resolution is merely laudatory and suggestive, a sort of sense of the Senate. It is not binding. Furthermore, within the revenue and spending limits allocated to each category of spending by the Budget Resolution, the specific tax and spending decisions taken to conform to these floors and ceilings are up to the several authorizing Committees, or, for revenues, up to the Finance Committee. They are not binding if dictated in the Budget Resolution. For all these reasons, any reserve fund recommended by the Chairman that requires offsets, and any tax recommended by floor amendment to fund a particular program, are purely advisory. Having said that, would it make sense 1) to triple funding for Schip, and 2) to pay for the expansion with an increase in the tobacco products tax? No and no again. 1) More money for Schip is being urged by the states in large part because they have over-spent on the program. 0 The federal aid was targeted at children in families with income of up to twice the poverty level. Several states have expanded their programs to include children in families with up to three or even S I g6~ I ~ee

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most