ALEXANDRIA, VA –Today, in an analysis of how the Administration’s tax deduction would affect the number of American children without health insurance, the Congressional Budget Office (CBO) affirmed that the president’s healthcare proposal does virtually nothing to address the 9 million American children without health insurance.

In a letter to Senator Max Baucus (D-MT), Chairman of the Senate Finance Committee, the nonpartisan budget organization stated that the president’s tax plan would result in a decrease of fewer than 0.5 million children from the ranks of the uninsured.

“The estimated net reduction of 6.8 million people includes a net decrease in the number of uninsured children of fewer than 0.5 million. That estimated reduction in the number of uninsured children is largely the result of two offsetting effects—some otherwise uninsured children would be covered by new family policies, and some otherwise insured children (covered by their parents’ employer-based policy under current law) would be uninsured under the proposal because their parents’ employer would not offer coverage,” the letter said.

In addition, CBO has previously noted that more than 1 million children would also lose coverage under the Administration’s proposed funding for SCHIP.

“This finding confirms what we all already know – the president’s tax proposal is not a viable alternative to the Children’s Health Insurance Program,” said Bruce Lesley, President of First Focus. “In comparison to the current Senate proposal, which would insure an estimated 3.2 million children, the president’s CHIP and tax credit alternative would result in a disparity of nearly 4 million American children without healthcare. That exceeds the number of children, with or without health insurance, living in the capital cities of all 50 states and the District of Columbia.”

“The fact that the president continues to single out our children is truly inexplicable. If the Medicare prescription drug benefit is good for our nation’s senior citizens, certainly we can do better for our nation’s children. Unfortunately, the children’s healthcare debate will continue to be held in the shadow of a veto by President Bush. For kids, his ideological position represents the biggest threat to their health and well-being.”

The text of the letter is below:

July 30, 2007

The Honorable Max Baucus
Chairman
Committee on Finance
United States Senate
Washington, DC 20510

Dear Mr. Chairman:

In response to your letter, the Congressional Budget Office (CBO) has estimated the impact on the number of uninsured children of the Administration’s fiscal year 2008 budget proposal that would replace virtually all of the current tax preferences for health insurance with a new standard deduction for taxpayers who buy a qualifying health insurance plan.

Earlier this year, CBO estimated that enacting the proposal would result in a net decrease of about 6.8 million in the number of uninsured people. (See Appendix C of CBO’s March 2007 An Analysis of the President’s Budgetary Proposals for Fiscal Year 2008.) Most of that reduction would result from otherwise uninsured adults purchasing coverage in the individual (nongroup) market, many of whom would find that the new tax deduction offset a substantial part of their insurance premium. The estimated net reduction of 6.8 million people includes a net decrease in the number of uninsured children of fewer than 0.5 million. That estimated reduction in the number of uninsured children is largely the result of two offsetting effects—some otherwise uninsured children would be covered by new family policies, and some otherwise insured children (covered by their parents’ employer-based policy under current law) would be uninsured under the proposal because their parents’ employer would not offer coverage.

I hope that this information is useful to you. If you have any questions, please feel free to contact me at (202) 226-2700. The staff contacts at CBO are David Auerbach and Stuart Hagen, both of whom can be reached at (202) 226-2666.

Sincerely,

Peter R. Orszag
Director

cc: Honorable Charles E. Grassley
Ranking Member