Is CHIP funding at risk? Federal rescission proposal raises concerns

May 14, 2018

After a long and drawn out renewal process, the Children’s Health Insurance Program (CHIP) seemed to be safe from further political twists. But CHIP is once again in the headlines because President Trump included cutting $7 billion from the program as part of a $15 billion rescission proposal he has sent to Congress.

Under the Congressional Budget Act, a presidential rescission request allows Congress to consider the request under an expedited process that cannot be filibustered in the Senate but must be completed within a limited amount of time. However, there is a procedural question whether the CHIP request complies with the terms of the Congressional Budget Act; if the Senate parliamentarian rules that the rescission proposal does not, then the proposal could be filibustered.

The proposed CHIP cuts come from two places. First, $5 billion comes from prior unspent CHIP allotments, and while the administration notes it lacks the authority to spend this money, children’s advocates argue that Congress traditionally reallocates those unspent dollars for other children’s health programs. Second, nearly $2 billion comes from a contingency fund to provide relief for states experiencing shortfalls in their CHIP allotment, and the rescission proposal assumes that no state will experience a shortfall or an emergency for the remainder of FY 2018. The nonpartisan Congressional Budget Office indicated that if these funds are rescinded, the rescission would not affect either “payments to states over the 2018-2028 period” or “the number of individuals with insurance coverage.”

Some pundits question if the rescission proposal will pass Congress. Even if the Senate parliamentarian rules that the CHIP rescission meets the requirements of the Congressional Budget Act, it is not clear whether there are sufficient votes in the Senate for passage. Other observers and policymakers are concerned that passing a partisan rescission bill will make it harder to achieve bipartisan compromise on the next appropriations bill when the fiscal year ends this September 30.

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