Thursday, October 18, 2007

Cigarette Tax Increase to Fund SCHIP Expansion is Dead

Earlier today, the U.S. House of Representatives failed (by 13 votes) to override President Bush's veto of a proposal that would have increased the federal excise cigarette tax by 61 cents per pack to fund an expansion of the SCHIP children's health insurance program.

My argument against the use of cigarette tax revenues to fund health insurance for children was highlighted by a Cybercast News Service article today. The article notes that more than 9 million new smokers would have been needed in the next 5 years in order to keep the program fully funded.

My quotes from the article:

"I don't dispute the idea that increasing the cigarette tax will reduce smoking. I don't think there's any question about that. But it doesn't make sense to me to permanently tie the financial solvency of children's health insurance to the need to continually increase the number of smokers."

"It's the most politically expedient solution. Clearly, to expand the program, you've got to get the revenue from somewhere, and I think that this is just the most politically easy target, because it's popular to go after smokers."

"Dr. Siegel disagreed [that declining cigarette consumption would not be a problem for program funding], explaining that tobacco taxes were effective when used to fund anti-smoking prevention programs, for which the need would diminish as the number of smokers decreased. But to fund a federal healthcare program, Congress was better off using another tax, he said."

"This is a situation where you're advocating a specific amount of money to a program based on cigarette revenue. So if that cigarette revenue falls, by definition, the revenue available to the program is going to fall."

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