On July 19, the Senate Finance Committee approved a proposal to expand coverage of the State Children's Health Insurance Program (SCHIP) to four million additional children who would otherwise not have health insurance. The entire Senate is expected to vote on the proposal this week (July 24-27), while the House is expected to act soon to approve legislation providing insurance for even more children than the Senate's version. The president has threatened to veto the Senate Finance Committee-approved version, even though it cleared the committee with strong bipartisan support, 17-4. SCHIP, which is administered by the states and relies on a block-grant funding formula, provides health insurance for children in families who earn a low income but do not qualify for assistance under Medicaid. It was created in 1997 on a bipartisan basis and has wide support in both chambers. Its authorization must be renewed before the end of September or the program will expire. The National Governors Association (NGA) is strongly supportive of a SCHIP authorization, writing numerous letters to the House and Senate, as well as the president — the most recent being sent on July 22. In that letter, the NGA again urged the Congress and president to reauthorize the program and stated they are encouraged by the efforts of the Senate to pass a bipartisan proposal that "increase[s] funding and reflects the general philosophy that state flexibility and options and incentives for states are preferable to mandates." The draft approved by the Senate Finance Committee — crafted by Sens. Max Baucus (D-MT), Chuck Grassley (R-IA), Jay Rockefeller (D-WV), and Orrin Hatch (R-UT) — would add $35 billion to the program over five years. This extra funding would enable states to provide coverage to four million more children, according to the Congressional Budget Office (CBO). The Center on Budget and Policy Priorities has found the vast majority of the four million children who would get insurance under the proposed expansion are already eligible for SCHIP, but, for lack of funding, have not been covered. About nine million American children are currently believed to be uninsured. President Bush has threatened to veto the Senate proposal, which exceeds his $5 billion request by $30 billion. CBO has estimated that it would take $13.4 billion just to maintain the level of coverage currently provided, so the president's request represents a real cut in services. For context, the entire FY 2008 budget stands at $2.9 trillion, more than 400 times the size of the Senate proposal. The House is considering a larger expansion than the Senate. Although a proposal has not yet been approved, media reports show the House will most likely consider a $50 billion expansion. Under the expected proposal, the House would find savings to pay for their proposal in the Medicare Advantage program, a privatization program that has been shown to cost 12 percent more than regular Medicare. Both the Senate and the House would pay for most of the expanded cost of the SCHIP reauthorization with a 61-cent increase in the federal cigarette tax. Some lawmakers oppose the increase, arguing that the program covers too many adults rather than children, and that an expansion will encourage people who already have private insurance to sign up for SCHIP. An analysis by the Center on Budget and Policy Priorities acknowledges that about a third of the new enrollees will have had private insurance, but all expansions of government-run health insurance have this "crowd-out" effect, and one-third of enrollees is a relatively low percentage compared to previous expansions. For comparison, under a Bush proposal to subsidize private health insurance, 77 percent of the benefits would go to people who already have health insurance. Furthermore, the bill approved by the Senate Finance Committee would shift non-pregnant, childless adults on SCHIP to Medicaid and prevent states from using SCHIP funds to sign up more non-pregnant, childless adults. The House hopes to move its SCHIP legislation out of committee to the floor the week of July 30, while the Senate is expected to begin debating its reauthorization bill on the floor this week. It is possible both chambers will pass their reauthorization proposals before the start of the August recess.