Wu tries to contain damage to SCHIP

Rep. David Wu (D-Ore.) is hoping to prevent the defeat of a children’s healthcare ballot initiative in his home state from gaining national momentum and is taking on the tobacco industry to do it.

Normally a low-profile lawmaker, Wu lashed out on Tuesday at cigarette makers and Republican opponents of federal legislation to expand the State Children’s Health Insurance Program (SCHIP), as he sought to reverse the spin on the failure of the Oregon SCHIP initiative.

{mosads}The ballot initiative, known as Measure 50, went down 60 percent to 40 percent on Nov. 6.

Despite the considerable margin of this defeat, Wu portrayed the outcome as the result of a tobacco industry-funded advertising campaign that sowed doubt in voters’ minds — not a rejection of a tax hike to fund children’s healthcare.

Citing a figure widely reported in the Oregon news media, Wu said that the tobacco industry, which supported a group called the Oregonians Against the Blank Check Committee, spent $12 million on television ads attacking Measure 50 in the weeks before Election Day.

Measure 50 would have used a constitutional amendment to increase the income limit enrollment in Healthy Kids, as SCHIP is called in Oregon, to 300 percent of the federal poverty level for a family of four. In addition, some families with incomes above that level would have been permitted to buy into the program if they paid the full premium.

Wu acknowledged that the anti-Measure 50 campaign raised a valid debate over whether to use a constitutional amendment to raise the cigarette tax. Voters also were asked to decide on substantially increasing the levy on a pack of cigarettes, which would have brought it above $2.

Since the measure went down, Wu said he has become more concerned that the defeat in Oregon would have ramifications for Congress. House members from both parties began questioning him “about the implications” of the outcome of the Oregon debate on the political risks and benefits of the federal SCHIP bill.

The significance of the defeat of the measure is still generating debate in Oregon. Editorial pages in the state have dueled over whether the defeat of Measure 50 signals that the state’s residents do not want tax increases to pay for healthcare or whether the clout of Big Tobacco overwhelmed the argument.

Rep. Greg Walden (R), the only member of Oregon’s congressional delegation to vote against the federal SCHIP bills, told the Portland Oregonian’s website last week that he had discussed Measure 50 with President Bush. “He was cognizant with the outcome of Measure 50,” Walden told the newspaper. He also described the legislation before Congress as the “twin sister” of Measure 50.

The tobacco-backed ad campaign hammered two main arguments: First, the constitutional amendment was not the right vehicle; second, most of the money would not in fact be earmarked for SCHIP.

Wu acknowledged that the former point was valid and made the initiative vulnerable, but he called the second argument a “lie.” He cited the Oregon Legislative Assembly’s official budget analysis, which states that 72.3 percent of the revenue would go to Healthy Kids, with the remainder divided between Medicaid and other healthcare programs.

The initiative’s opponents, however, emphasized that Measure 50 would have permitted Oregon to use the new tobacco revenue on other healthcare programs, including those for low-income adults, said J.L. Wilson, the spokesman for the anti-Measure 50 committee. Nevertheless, the ballot measure would have required the state to fully fund Healthy Kids before it would have been free to use the money on other healthcare priorities. “The defeat of Measure 50 was not about children’s healthcare. It was about the power of money to change the subject,” Wu said at a press conference. “They changed the subject in Oregon and they’re trying to change the subject here in Washington, D.C.”

Measure 50 had a laundry list of supporters among business, organized labor and patient organizations, but it failed to mount an effective counter-campaign.

Despite the backing of Gov. Ted Kulongoski (D) and the potential to tap the resources of national groups like the American Cancer Society, health insurance companies like Kaiser Permanente, and Oregon’s doctors, nurses and hospitals, opponents outspent supporters by 4 to 1, Wu said.

Legislation that passed Congress several times this year and was vetoed by President Bush also would have hiked the tax on a pack of cigarettes to create a revenue stream to finance an expansion of SCHIP.

Wu indicated that using a constitutional amendment to enact the tobacco tax in Oregon was a misstep, but he blamed tobacco-industry lobbying on the Democratically controlled Oregon legislature for compelling lawmakers to make that choice.

Oregon law requires 60 percent majorities in the state Assembly and the Senate to enact tax increases. Only a simple majority, however, is needed to send an initiative to voters.

Highlighting the initiative’s constitutional nature and the fact that another amendment would be needed to repeal it resonated with Oregon voters, Wu conceded. “Oregonians are wisely reluctant to change our state constitution,” he said.

But in addition to the constitutional issue in Oregon, the ballot initiative would have levied a much larger tax increase than the federal bill. While the federal bill proposes to hike the per-pack tax by 61 cents to a total of $1, Measure 50 would have raised the per-pack tax from $1.18 to $2.02.

During the state’s biennial budget period from 2007 to 2009, the proposal would have generated an additional $152.7 million. During the following two-year period, the take would have been $233.2 million, according to the Assembly’s analysis.