Saturday, August 4, 2007

The Republicrats Keep Expanding the Welfare State

By: Murray Sabrin

On Wednesday, the House of Representatives passed an extension of the State Children’s Health Insurance Program, known as SCHIP, along party lines that would increase funding by $50 billion over the next five years to $75 billion ($15 billion per year), from the $5 billion per year the federal government is currently spending.

The Senate version overwhelmingly passed on Thursday, 68-31, calls for a $35 billion hike to $60 billion over five years, or $12 billion per year. The program would be financed by increases in tobacco taxes and cuts in subsidies to private Medicare insurance plans for seniors.

Governor Corzine was in Washington D.C. on Wednesday lobbying his former colleagues to pass the more expensive SCHIP version passed by the House. Corzine wants a huge boost in the federal government’s commitment, because the funds earmarked for New Jersey would insure about half of the 250,000 uninsured children and another 10,000 to 15,000 adults in New Jersey.

That would mean more state spending at a time when New Jersey is broke. The feds and state government split the cost of SCHIP—65/35. So where will the money come from to enroll more children and adults in New Jersey? Moreover, if the SCHIP program is expanded, another 3 million more children would be covered nationally. Lawmakers want to pass an extension of the Children’s Health Insurance Program, which covers 6.6 million children, ASAP because it is scheduled to expire on Sept. 30.

If either the House or Senate version is passed extending SCHIP, President Bush has threatened to veto the bill as too expensive. He wants only a $5 billion increase in the program over five years. In other words, lawmakers on both sides of the aisle in Congress and President Bush agree on the basic premise of SCHIP: the federal government should subsidize medical insurance for low and middle-income children. In short, both the Democrats and the Republicans want to enlarge the welfare state. They just debate how fast the welfare state should grow.

Instead, the debate in Congress should focus on a more fundamental proposition: Why are the federal government and state governments responsible of the well being of children? Aren’t parents supposed to be responsible for their children’s welfare? If you answer yes, then we as a society should create nongovernmental, nontaxpayer funded organizations in all localities to provide low cost or free healthcare for uninsured families. (More about this in future blogs.)

Regrettably, the goal of America’s political elites is to give us government funded universal health care on the installment plan, because they knew decades ago the American people would not embrace a total government takeover of health care in one fell swoop. Their strategy has been working brilliantly, so far. First, they gave us Medicare and Medicaid in 1965, SCHIP in 1997, prescription drugs for Medicare recipients in 2003, and now they want a major expansion SCHIP.

If President Bush does veto a substantial expansion of SCHIP this year, the Democrats will use his veto as a key campaign issue in 2008. And if the Democrats win the presidency next year and retain control of the Congress as well, government spending on healthcare will increase substantially in 2009 and bring us closer to a total government control over health care.

As one well known satirist said many years ago, “If you think health care is expensive now, wait until it is free.”

Murray Sabrin, Ph.D., is professor of finance in the Anisfield School of Business and executive director of the Center for Business and Public Policy. He also blogs for the Star-Ledger twice a week, Sabrin writes a weekly column every Monday for