Senator Eliot Shapleigh - El Paso, Texas

LANDOVER, Md. -- President Bush on Wednesday reiterated his threat to veto Senate legislation that would substantially increase funds for children's health insurance by levying a 61-cent-a-pack increase in the federal excise tax on cigarettes.

The renewal of the State Children's Health Insurance Program, or SCHIP, is considered by many to be the most important health legislation that Congress will take up this year.

The tax increase would subsidize health insurance for children and some adults with incomes too high to qualify for Medicaid but not high enough to afford insurance on their own.

Bush's position

"Members of Congress have decided, however, to expand the program to include, in some cases, up to families earning $80,000 a year -- which would cause people to drop their private insurance in order to be involved with a government insurance plan," Bush said in a speech in suburban Maryland.

"If Congress continues to insist upon expanding healthcare through the SCHIP program -- which, by the way, would entail a huge tax increase for the American people -- I'll veto the bill," he said.

The American Hospital Association, the American Medical Association and the American Cancer Society support the increase.

But the administration, which refers to SCHIP as government-run healthcare, says billions of dollars in insurance costs will be shifted from the private sector to the federal government under the Senate proposal.

The proposal

Democratic leaders called for adding $50 billion to the program over the next five years. Bush had recommended a $5 billion increase. On Friday, a bipartisan group of lawmakers in the Senate signaled their support for a $35 billion increase, bringing total funding to $60 billion over five years. The proposal would provide health insurance coverage to 6.6 million children currently covered as well as an additional 3.3 million uninsured children, according to estimates from the Congressional Budget Office.

Texas CHIP

The looming showdown over the children's health program in Washington is unlikely to affect Texas, at least in the short term, a spokesman for the state health and human services commission said Wednesday.

"States have three years to spend their federal allotment for CHIP, and Texas has been underspending. So we should be OK," Stephanie Goodman said. "Could it become an issue down the road? Maybe. It's too soon to tell."

During the recently concluded legislative session, Texas lawmakers allocated enough money in the two-year budget, which takes effect Sept. 1, to boost the rolls by about 120,000 for the program that provides coverage to youngsters in low-income working families. That money should be sufficient regardless of what happens to a proposal to boost the federal tax on cigarettes, Goodman said.

"We'll have enough money to do everything the Legislature asked us to do, at least for the next two years," she said. "If there's a problem after that, there will be enough time for the Legislature to address it when they come back in 2009."

-- Staff writer John Moritz