Veto Threat Angers Republicans

The decade-old program, which now costs about $5 billion a year, targets children whose families earn too much to qualify for Medicaid but not enough to buy insurance on their own. Studies credit it with reducing the number of uninsured children by millions since 1997, although that number has begun creeping up again. About 9 million children did not have health insurance last year, according to the most recent census figures.

The emerging compromise would boost the program's total funding to $60 billion over the next five years, with the expansion to be funded by a 61-cent increase in the federal excise tax on cigarettes, to $1 a pack. The original House version, now abandoned, called for total funding of $75 billion over five years. Bush has proposed total funding of $30 billion over five years, an amount the Congressional Budget Office has said is insufficient to continue covering the children who are already in the program.

"The president may be willing to cut off health care for low-income kids, but here in Congress we are not," said Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee and one of the lead negotiators.

The White House contends that the president is trying rein in a program that has strayed from its original mission. Since 2001, the administration has granted several states permission to expand eligibility by raising their income ceilings to as high as $72,225 for a family of four and allowing about 600,000 adults to enroll. But many low-income children are still not enrolled, and now the White House wants states to focus on them, an effort administration strategists think will win Bush support among fiscal conservatives and free-market purists.

"We would like to put poor children at the head of the line," Health and Human Services Secretary Mike Leavitt said yesterday.

Democrats say poor kids remain the priority.

"The president is wrong when he says Democrats want a political victory," said House Speaker Nancy Pelosi (D-Calif.). "What we want is a bipartisan bill. What we want is health care for 10 million children."

House Republican leaders said it will take more time. More than 100 GOP lawmakers introduced a bill to extend the existing program for 18 months, with $6.5 billion in funding for fiscal 2008.

"Time is running out for the SCHIP program, and yet the majority seems intent on putting politics before the needs of low-income children," said House Minority Leader John A. Boehner (R-Ohio).

Staff writer Michael A. Fletcher contributed to this report.