Interested in protesting the CMS decision to limit SCHIP eligibility? Get your Senator to sign this letter, addressed to President Bush, denouncing these changes. The letter is being circulated by Sen. Robert Menendez (D-NJ) and Sen. Gordon Smith (R-OR).

Also, if you want to know more about the SCHIP regulatory changes, check out this fact sheet.

Lots of good stuff came out today.

• A Congressional Research Service (CRS, aka the super-authoritative researchers who members of Congress ask to do reports for them, but typically the reports aren't available to the public) comparison of the House and Senate SCHIP bills
• The House Budget Committee's breakdown of how some of Bush's proposed budget cuts would impact each state
• A knowledgeable article in the Washington Post about the rise in no-bid contracting
• A good New York Times article about take-up rates in the State Children's Health Insurance Program (SCHIP)

A popular topic of discussion among the budget folk here at OMB Watch is the mystery of President Bush's veto threats, which he's made against just about every remotely progressive piece of legislation being considered by Congress. His party just lost an election, and President Nixon was better liked. Where does he get off trying to stymie Congress?

As we sketched out in this article for TomPaine.com, it's critical that Congress stand up to the President, on substantive policy grounds. But another reason to hold firm is that liberals will be demoralized if the President wins too many more of these fights. A loss would reinforce doubts about the competence and courage of progressive leadership, who would not have been able to control the President even at his weakest. It would set the stage for an election year with a progressive base feeling less motivated to turn out to vote.

The President's strategy is quite risky. There's plenty of opportunity for it to backfire. Congressional Republicans should find it very costly to oppose spending for children, students and low-income workers, or to be associated with the unpopular President. Typically, these costs would be enough to ensure the passage of modest program expansions.

But these are desperate times. The President is in a hole, so he's chosen to raise the stakes on a weak hand, so to speak. The stakes being so high, it's critical that liberals call his bluff.

Fiscal policy may not be first on everyone's list of priorities. Making only modest progress, as the raft of fiscal policy proposals now being considered would, probably won't fire up liberals as much as, say, ending the war in Iraq would. But a loss to a reviled and weakened Administration could be far more influential. Perhaps that as much as anything else is what President Bush and other conservatives are trying to achieve, and what liberals need to stop.

What is with this guy?

The Bush administration, engaged in a battle with Congress over whether a popular children's health insurance program should be expanded, has announced new policies that will make it harder for states to insure all but the lowest-income children.

New administrative hurdles, which state health officials were told about late last week, are aimed at preventing parents with private insurance for their children from availing of the government-subsidized State Children's Health Insurance Program. But Democrats and children's advocates said that the announcement will jeopardize coverage for children whose parents work at jobs that do not provide employer-paid insurance.

Under the new policy, a state seeking to enroll a child whose family earns more than 250 percent of the poverty level -- or $51,625 for a family of four -- must first ensure that the child is uninsured for at least one year. The state must also demonstrate that at least 95 percent of children from families making less than 200 percent of the poverty level have been enrolled in the children's health insurance program or Medicaid -- a sign-up rate that no state has yet managed.

How devoted to "small government ideology" do you have to be to devise new and clever ways to prevent children from getting health care? It's really an unhealthy obsession.

The NYT's Robert Pear reports today that the agency that administers the State Children's Health Insurance Program (SCHIP) has issued new guidelines that could limit eligibility.

The Bush administration, continuing its fight to stop states from expanding the popular Children's Health Insurance Program, has adopted new standards that would make it much more difficult for New York, California and others to extend coverage to children in middle-income families.

Administration officials outlined the new standards in a letter sent to state health officials on Friday evening, in the middle of a monthlong Congressional recess. In interviews, they said the changes were intended to return the Children's Health Insurance Program to its original focus on low-income children and to make sure the program did not become a substitute for private health coverage.

A sidenote- the White House has a pattern of pursuing policy goals that Congress has rejected with regulatory and management tools. For example, the IRS offered early retirement to nearly half of all estate tax auditors just after the Senate rejected both a repeal and a roll back of the estate tax. The opportunism of this Administration knows few bounds.

SCHIP advocates are likely to take action on this issue, and we'll post updates as we get them.

In the online journal Health Affairs, there's a study of the number of children who are eligible for the State Children's Health Insurance Program (SCHIP) but aren't being covered. The authors- two economists at a federal health care research agency- found that 62 percent of uninsured children are currently eligible for SCHIP. That's 5.5 million kids, the vast majority of whom live in families whose incomes are below 200 percent of the poverty line and are disproportionately headed by a single parent.

And for the fiscal policy folks, there's this interesting twist on the cost of SCHIP:

More fundamentally, an unappreciated aspect of crowd-out is that private insurance is itself subsidized through tax exclusions.21 One must be careful to account for this subsidy, along with savings on uncompensated care and other public programs, when considering the cost of expanding SCHIP. In a previous study, we estimated that the true cost of covering a child in SCHIP is only half the apparent budgetary amount when one accounts for offsetting program savings.22 Another factor helping reduce costs is that more than 90 percent of all eligible children above 200 percent of poverty face cost sharing in the form of premiums, copayments for services, or both.23

As you may know, the House-passed version of the SCHIP expansion is estimated to provide coverage for 5 million more children who would otherwise be uninsured, while the House version would cover 4 million more.

Via BNA (subscription only).

A report by the National Priorities Project finds that of all people that are income-eligible to receive food stamps, only half actually receive them.

• Half of all low-income people did not receive Food Stamp Program benefits.
• Counties with lower poverty rates and higher median household incomes had lower percentages of low-income people that were Food Stamp recipients.
• A significant number of counties, 13.2 percent, had below-average percentages of Food Stamps, yet had above-average poverty rates.
• The rural South had the highest percentage of enrollment in the Food Stamp program and more than half of all children were eligible for lunches through the National School Lunch Program.

Report (pdf): Half of Low-Income People Not Receiving Food Stamps

Senate Majority Leader Harry Reid has announced that the Senate will vote on the nomination of Jim Nussle to be the new Director of the Office of Management and Budget on Monday, September 4 - the first day back from the August recess. Reid announced there will be three hours of debate on the nomination beginning at 2:30 pm. One hour each for the chairman and ranking member of the budget committee, and one hour controlled by Sen. Bernie Sanders (I-VT).

Sanders has announced a hold on Nussle's nomination because he has serious concerns about the nominee and his philosophical differences with the administration's fiscal policies. Sanders said:

President Bush is completely out of touch with the economic realities facing working families in America. Bush needs to hear the truth, not an echo. He needs a budget director who will make him face the facts, not fan his fantasies.

Paul Krugman has a must-read, or maybe a I-highly-recommend-you-read-it column today. You can get it for free over at Economist's View. It begins:

It's been a good Democrats, bad Democrats kind of week. The bill expanding children's health insurance that just passed in the House makes you want to stand up and cheer. Reports that Senator Charles Schumer opposes plans to close the hedge fund tax loophole make you want to sit down and cry.

Matt did a good job this morning of giving the business to Robert Samuelson. Economist/blogger Mark Thoma weighs in as well for good measure. Thoma makes the critical point:

Samuelson seems to have completely missed the connection between health care reform and his pet column peeve, hence his claim that the problem is being ignored in the political debate when that isn't the case. In addition, Samuelson's continual focus on the budget deficit obscures the real problem. It doesn't matter whether health care is in the public domain or the private domain, the costs will be daunting either way if they continue on their present trajectory, so finding ways to hold down health care costs is where the focus needs to be.

Exactly.

Samuelson is miffed that a gang of six think tanks have been derelict in their duty to ride his personal hobby horse. He complains that three left-leaning and three right-leaning think tanks have not yet gotten together to write a single book, with each contributing 35 pages, about the horrors of the retirement of the Baby Boom generation.

It would illuminate the connections between defense spending, retirement benefits, health care, economic growth and much more. Writing for a general audience, it would favor plain English, not the usual technobabble.

His beef is that think tanks writ large have yet to address his fears. I submit that perhaps there's a good reason for this: Think tanks have in fact thought about this and concluded that long term fiscal challenges cannot be met by simply cutting Socialsecurityandmedicare benefits. It's entirely possible that think tanks have figured out that these are multidimensional, complicated issued that require multiple policy solutions that cannot be addressed in 35 pages and require big words and numbers to describe them.

The Heritage Foundation just put out a report on the fiscal responsibility-ness of the Senate's SCHIP bill. It's stupid, but it begins with the fair point that the legislation would sunset, in 2013, the funding increases it would set up.

The Senate bill would gradually increase federal funding for SCHIP from the current $5.6 billion level to $14.1 billion in 2012. Then, suddenly, funding would plummet to $6.2 billion and $4.7 billion over the subsequent two years, and not top $5.0 billion again through 2017 (see chart 1).[4] If Congress enacts this legislation, lawmakers in 2013 will face two options:

1. Drop SCHIP funding 70 percent, substantially reducing the number of enrollees, or

2. Add approximately $60 billion in new spending over the next five years to maintain current enrollment.[5]

There is also a third option: add the $60 billion in new spending in 2013, when SCHIP will need to be reauthorized anyway, and pay for it. Indeed, if Congress does not pay for it then, they'd violate PAYGO rules if they're still around. Heritage is lying when they say there are only two options and that a paid-for renewal isn't one of them.

Ideally, Congress would have paid for this expansion now and gotten it over with. But just because the bill's finances are less than ideal, doesn't mean a serious violation has occurred. There will be pressure to extend this funding and not pay for it, but folks like us will bring pressure going the opposite way, too, and no rule has been broken.

And to attack a budget gimmick with more smoke and mirrors shouldn't fly either. Two wrongs don't make a right and all.

Robert Samuelson has yet another ridiculous column on the long-term fiscal gap.

Here's a list of the things I don't like about it (in order of importance):

• He excludes OMB Watch from a list of think tanks he'd invite to an intense think-session on the long term fiscal problem.
• His ideological labels- He calls them liberal, but Brookings and the Urban Institute are non-ideological, though on this issue they're probably center-left. Ditto for Center on Budget and Policy Priorities- all have advocated for some kind of combination of budget cuts and revenue increases, and believe in finding savings in Medicare to the extent possible. There are of course differences, but for brevity's sake let's say they're on the center-left side. And he calls them conservative, but let's call Cato, Heritage, and AEI crazy because all they've ever wanted to do is cut and privatize Medicare, Medicaid and Social Security, which won't solve the problem, but will achieve the ideological goals of destroying government and promoting unbridled capitalism.
• Oh yeah, the substance- the man just can't get his head around the idea that maybe, just maybe, the entire problem results from inefficiencies in the health care market, and not his simplistic idea about population growth. The way to solve the problem, fundamentally, is to root out wasteful spending. Perhaps that puts me off Samuelson's political spectrum, but it also happens to be a solution based on a correct appraisal of the problem, an appraisal that most honest people who study the issue support.

People who don't overlook the facts disagree on how exactly to reform the health care system. I'm of the mind that other countries have blazed a trail toward humanitarian, cost-efficient, and yes, government-run, health care that we can follow. We can have that conversation with or without Mr. Samuelson (indeed, many presidential candidates are talking about how to bring down health care costs). If he wants to join it, he should get his head straight.