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Clinton Tells Nation's Governors: Smaller Tax Cut, Expanded Effort on Childrens Health Insurance Needed

Conference President Urges Expansion of CHIP Program

By Jubi D. Headley, Jr.

Speaking to the National Governors' Association meeting in St. Louis on August 8, President Clinton sounded two primary themes in his address: his promise to veto a Republican-passed tax cut bill, and an appeal to the governors to step up their efforts to provide health insurance for children. Clinton also reassured the governors that they would resist any efforts by members of Congress to take back unused welfare funds that have been building up in the states since the approval of a reform plan three years ago.

Clinton warned that Congress cannot cut taxes by nearly $800 billion and still have funding available to provide additional relief for farmers facing economic ruin, national defense and other areas--without, that is, having to dip into projected Social Security surpluses. He further cautioned governors that a big tax cut could trigger an interest rate hike by the Federal Reserve. "We have been told repeatedly, in a soft and indirect way, from the Federal Reserve Chairman to the pages of all the business articles that you read, that if -- with the economy growing like it is, if we have a tax cut of this size, it will lead to larger interest rate increases, and most people will turn right around and pay back, in higher interest costs, what they are going to get in a tax cut," President Clinton said.

Clinton, while stressing deep policy differences with the GOP over the budget, Medicare solvency, and tax legislation, nevertheless concluding his comments on the tax bill by saying, " I am not nearly as pessimistic as a lot of people are about the prospects of our reaching an agreement, and I am determined to try to do it."

More anxiously anticipated by the governors--and potentially more contentious--were Clinton's comments about the Children's Health Insurance Program (CHIP). Clinton maintained that while many states have made progress enrolling children in the new program--which is aimed at low-income families that do not qualify for Medicaid coverage--much more needs to be done by the states on outreach and enrollment efforts. The comments came in the midst of congressional debate over reducing funding for the widely popular program. "There's also some discussion in Washington about whether the Congress should reduce the funding for the CHIP program," President Clinton told the governors. "And again, I think that's a mistake, because between CHIP and Medicaid, and now funded, the vast majority of children in this country without health insurance could get it. And that would be a good thing."

While Clinton acknowledged and praised the states' efforts thus far in enrolling 1.3 million eligible children in CHIP, he reminded governors how much more work needs to be done. "We know that there's money out there for four to five times that many children to get health insurance. And I think that rather than talk about giving the money back to Congress, we should talk about how we're going to invest it for the purpose for which it was intended."

Clinton urged governors to increase their reporting of enrollment numbers and other data. "We can't improve the program or know what's wrong with it unless we know how many children have signed up for it," Clinton said. "To date, 20 states haven't sent us the information. Some haven't reported on the basic information about children on the Medicaid rolls." He also encouraged governors to put more outreach workers in schools, churches and other community settings, and to support presumptive eligibility for children enrolled in the program.

Clinton promised that the federal government would support states' outreach efforts with a few initiatives of its own, including a letter campaign to school superintendents and school principals urging them to increase efforts to identify eligible children; launching an outreach program through the United Way; and initiating state-by-state reviews to eliminate roadblocks that may be preventing children eligible for either CHIP or Medicaid from being enrolled.

News articles and reports following the address carried significant rebuttals by governors, maintaining that governors were in fact on target in CHIP enrollment, and citing a study by the Kaiser Family Foundation. Governors Jeanne Shaheen (NH) and Tommy Thompson (WI) also pointed out that delays by the federal government in approving their states' applications for had held up implementation.

The Conference has supported CHIP since its inception, but has long maintained that while states should administer the program, local jurisdictions should logically receive funding for outreach reach efforts. In a letter addressed to President Clinton, Denver Mayor and Conference President made exactly that point. "As public health and public relations professionals have warned us time and time again, information dissemination, in the absence of sustained, intensive interventions at the community level, will ultimately fail as an outreach tool," Mayor Webb stated. "The notion of states conducting 'outreach' is in fact counter-intuitive to what is commonly understood about community outreach--that it must be done, first and foremost, at the local level."

Citing cities' unique understanding of the diverse communities and populations who are ostensible beneficiaries of CHIP, Mayors Webb called for funding to be made directly available to local governments to enroll eligible children in CHIP.

Currently, CHIP's program structure funnels all funding, including funding for enrollment and outreach efforts, directly to states, which then are charged with program implementation. We propose what we feel is a practical and effective solution to this problem: that direct funding made available to cities and other units of local government, specifically and solely for the purpose of enrolling eligible children in the CHIP program. "The Conference is confident that, working in partnership with the federal government and states, we could achieve significant success in enrolling target numbers of children in the CHIP program, by leveraging resources provided within the foundation and private sectors," Mayor Webb concluded.

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