What: All Issues : Government Checks on Corporate Power : Tobacco Industry : HR 976. (Small business tax breaks and children's health insurance), motion to preserve increased funding for children's health insurance programs/On the motion
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HR 976. (Small business tax breaks and children's health insurance), motion to preserve increased funding for children's health insurance programs/On the motion
senate Roll Call 306     Aug 02, 2007
Y = Conservative
N = Progressive
Winning Side:

This vote, which occurred on a complicated bill that sought to expand the State Children's Health Insurance Program (SCHIP), was on whether to allow the measure to go forward even though it violated the Senate's rules against increasing deficit spending.

The SCHIP program – funded primarily through taxes on tobacco products -- helps low income families with children afford health insurance, and currently covers about 6 million kids. The bill this vote occurred on would significantly expand the program, by $35 billion over five years, largely through increasing excise taxes on cigarettes by 61 cents, to $1 per pack.

Saying the measure violated the Senate's budget rules, Sen. Elizabeth Dole, R-N.C., attempted to kill the bill with a procedural maneuver. This was likely a bit of parliamentary maneuvering to make a political point, as it never had a real chance of success. Dole represents North Carolina, which nurtures a thriving tobacco farming industry, including cigarette giant Phillip Morris, which held more than 50 percent of the cigarette market in the first quarter of 2007. Later during the debate on the bill, Dole tried to amend the measure to create a new budgetary rule against any measure that increases excise taxes (including tobacco taxes), which failed.

Dole argued that the SCHIP program is unfair and "fiscally unsound." Dole noted that tobacco sales are on the decline, partially due to the federal excise taxes placed on the industry to help fund SCHIP. Dole also implied that the program may encourage more smoking, since declining revenues will mean that more than 22 million additional Americans will need to start smoking "to keep the SCHIP program running over the next decade." She also criticized the program because poor people are overrepresented among the ranks of smokers, making the tax on tobacco affect them more than other groups. "In addition, according to the Tax Foundation, no other federal tax hurts the poor more than the cigarette tax. Of the 20 percent of the adult population who smoke, around half are in families earning less than 200 percent of the Federal poverty level. In other words, many of the families SCHIP is meant to help will be disproportionately hit by the Senate's proposed tax hike," she said.

"I oppose this tax hike plan not only because it is fiscally unsound but also because it unfairly hurts the economy of my home state of North Carolina.. A massive and highly regressive tax increase on an already unstable product is an irresponsible way to fund such an important program," she said.

Sen. Max Baucus, D-Mont., rebutted Dole simply by saying "I know she means well, and is fighting very hard for her state."

Beyond Dole's parochial battle, fiscal conservatives bristle at such large raises in SCHIP – including the White House, which has threatened a veto over the bill's spending levels – believing it is nothing more than an attempt to expand government-run health care. Progressives, on the other hand, see the program as vital to ensuring the health and well-being of low-income children achieved by taxing a social vice with severe health impacts for Americans (cigarette smoking).

The motion to allow the bill to go forward even though it violated the Senate's budget rules was approved, 67-32, with several Republians joining Democrats on the vote. This vote achieved the three-fifths majority of the Senate needed (60 votes). Thus, the budgetary rules against increasing deficit spending were waived, and debate continued on the children's health insurance bill despite Dole's objection.

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