Bush Vetoes Health Measure
President Says He's Willing To Negotiate

By Michael Abramowitz and Jonathan Weisman
Washington Post Staff Writers
Thursday, October 4, 2007

President Bush yesterday vetoed a $35 billion expansion of a popular children's health insurance program, a move that left him as politically isolated as he has ever been and had even Republican allies questioning his hard-line strategy.

Bush advisers said they remain hopeful that they can secure an extension of the 10-year-old program with a lower price tag, saying they want to open negotiations soon.

But House Democratic leaders signaled they are not yet ready to bargain. They have delayed until Oct. 18 a vote to override the veto, in hopes that a grass-roots campaign by health-policy advocates and a barrage of television and radio advertisements will win over the 15 or so Republicans they will need to overcome Bush's opposition.

The veto, only the fourth of his presidency, underscored how Bush and Congress have yet to find a way to work effectively together, nine months after Democrats took control. White House aides were quick to criticize Democrats, but even some administration allies on Capitol Hill and K Street said Bush had only himself to blame for not finding common ground on a children's health program that both sides profess to like.

"Look, I disagree with the [White House] legislative staff on all of this," said Sen. Orrin G. Hatch (R-Utah), a key negotiator on the vetoed bill. "Frankly, I think the president has had pretty poor advice on this. I can answer every objection that they've made, and I'm very favorable to the president. I know he's compassionate. I know he's concerned about these kids, but he's been sold a bill of goods."

Chip Kahn, a former GOP health-care aide on Capitol Hill who heads a trade association for hospitals, said he is "befuddled by the White House approach to this legislation and can't fathom that there isn't some compromise that couldn't satisfy everyone enough to get this bill enacted."

Administration officials said that the criticism is unfair and that Democrats had not taken into account the president's concerns. Appearing before a business group in Lancaster, Pa., Bush accused his congressional opponents of trying to "federalize health care." But he said he is open to negotiations and is willing to include a "little more money" if it is aimed at enrolling more low-income children.

Administration officials said it is far too early to write off the issue. In an interview, Health and Human Services Secretary Mike Leavitt recalled the example of welfare reform legislation in 1996, which was vetoed twice by President Bill Clinton before he reached an accommodation with a GOP Congress. "A bill was arrived at, it passed, and it was a very successful initiative," he said, suggesting that the same thing could happen this year.

At issue is a program that provides health insurance for children whose families earn too much to qualify for Medicaid but cannot afford private health insurance. The vetoed measure would expand the $5 billion-a-year program by an average of $7 billion a year over the next five years. Supporters say that would be enough to boost enrollment to 10 million, up from 6.6 million, and dramatically reduce the number of uninsured children in the country, currently about 9 million.

The current confrontation stems as much from the White House's desire to use the bill reauthorizing the State Children's Health Insurance Program to advance Bush's proposals to expand health insurance coverage through tax breaks as it does from his budgetary concerns. The idea was a major focus of the State of the Union address, and Bush and his advisers tried throughout the spring to interest lawmakers in attaching the measure to an SCHIP bill.

But the key Republicans on health-care issues, including Sen. Charles E. Grassley (Iowa), the ranking GOP member of the Finance Committee, said they found no takers for this approach. Hatch, a conservative, said he thought Bush was being unrealistic and had not come to grips with the fact that Democrats now run Congress.

"That's great if they had done all the preliminary work, but they hadn't done that at all. And to do good health-care bills, it takes years," Hatch said in an interview.

At Grassley's behest, Leavitt and White House economic adviser Allan Hubbard contacted Sen. Ron Wyden (D-Ore.), who along with Sen. Robert F. Bennett (R-Utah) had been pushing a bipartisan measure to provide universal health coverage through private insurers. But in more than 20 phone calls and meetings, Wyden said, the White House was never willing to go beyond Bush's far more limited health-care tax proposals.

One senior Republican aide, who insisted on anonymity to discuss internal deliberations, said the White House refused to believe Grassley's repeated assertions that Wyden was not interested in using SCHIP for a broader new health initiative. "They cut themselves out of the process by insisting that any SCHIP extension be linked to" their broader health agenda, this official said.

In April, Grassley and Hatch decided to pursue a separate deal with Democrats, and it was too late for the White House to realize its ambitions. "Even if I got run over by a bus, it would be a non-starter," Wyden said. "Senators Grassley and Hatch had moved on."

Then, in August, the Bush administration changed the rules on the existing SCHIP system to make it far more difficult for states to expand eligibility. The administration said that the new rules were meant to more sharply focus the program on the uninsured children of the working poor. But Democrats -- and some Republicans -- saw such an important decision being made in the middle of legislative deliberations as punitive and provocative.

"The new SCHIP rules just sent a cannonball into the crowd that was working on this," said Sen. Edward M. Kennedy (D-Mass.).

At the same time, House Democrats decided to defuse Bush's new effort to draw a line on fiscal issues by making sure that the first bill he vetoed this fall was one on children's health care instead of one of the spending bills he has threatened to block. "They saw it coming, but they never altered their game plan," said Rep. Rahm Emanuel (D-Ill.).

White House aides offered no apologies for their negotiating tactics. "None of us were embarrassed" by the effort to pursue a broader health agenda, said Hubbard, director of the National Economic Council at the White House. He said the reauthorization of SCHIP is an opportunity not only to help poor children but also to expand access to health care for other Americans.

Leavitt said he was surprised "that the Democrats in Congress, who have for years pursued national health insurance, rejected an invitation of a Republican president to advance the cause of every American having insurance."

Staff writer Michael A. Fletcher in Lancaster, Pa., contributed to this report.

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