CNN's Sylvester misled on House SCHIP bill's effect on budget and its citizenship verification process

During the January 14 edition of CNN's Lou Dobbs Tonight, correspondent Lisa Sylvester uncritically reported that "[f]iscal conservatives ... argue" that a proposed 61-cent tax increase on cigarettes that is included in a House bill (H.R. 2) expanding the State Children's Health Insurance Program (SCHIP) "will not generate enough revenue to pay for the program." However, as the Center on Budget and Policy Priorities (CBPP) has noted, a Congressional Budget Office cost estimate of the bill found that the cost of expanding SCHIP would be, in CBPP's words, "fully offset, primarily through an increase in federal tobacco taxes." Sylvester did not note the CBO's conclusion. Additionally, Sylvester reported that "conservatives on the Hill are ... charging that the legislation will make it easier for illegal aliens to receive government-paid health insurance." She then aired House Minority Leader John Boehner's (R-OH) claim that "no verification system to speak of is contained in the bill." But Sylvester did not mention that H.R. 2 does include a citizenship verification process in which states would use SCHIP applicants' names and Social Security numbers to determine whether they are eligible. During much of Sylvester's report, on-screen text read "Illegal Alien Bailout."

During her report, Sylvester said the following about H.R. 2, which the House passed that day: "Fiscal conservatives take issue with the price tag and argue a proposed 61-cent federal tax on cigarettes will not generate enough revenue to pay for the program, estimated to cost at least $32 billion in the first 4 1/2 years." But according to the CBO's January 13 cost estimate for H.R. 2, increases in "several types of excise taxes on tobacco" would nearly cover the spending increases prescribed in the bill, while "other revenue effects stemming from provisions in H.R. 2" would more than offset the rest, meaning that the overall budgetary impact would be to reduce deficits:

The effects on direct spending and revenues over the 2009-2013 and 2009-2018 periods are relevant for enforcing pay-as-you-go rules under the current budget resolution. CBO estimates that enacting H.R. 2 would increase direct spending by approximately $32.3 billion over the 2009-2013 period, and by $65.4 billion over the 2009-2018 period. In addition, the Joint Committee on Taxation (JCT) estimates that certain provisions of the bill would increase federal revenues by $31.3 billion over the 2009-2013 period and $64.7 billion over the 2009-2018 period. Accounting for those effects and other revenue effects stemming from provisions in H.R. 2, CBO estimates that enacting the legislation would reduce deficits by $1.1 billion over the 2009-2013 period and by $1.7 billion over the 2009-2018 period.

[...]

H.R. 2 contains provisions that would both increase and decrease direct spending, as well as increase federal revenues. CBO estimates the net budgetary impact of the legislation will be to reduce deficits by $1.1 billion over the 2009-2013 period, by $1.7 billion over the 2009-2018 period, and by $0.4 billion over the 2009-2019 period.

[...]

Revenues

Tobacco Excise Tax. The legislation contains provisions that would raise several types of excise taxes on tobacco. Those provisions include language that would raise the federal excise tax on cigarettes from 39 cents a pack to $1.00 a pack, and would also increase taxes on other tobacco products. JCT estimates that those provisions would increase revenues by $31.3 billion over the 2009-2013 period, by $64.7 billion over the 2009-2018 period, and by $71.1 billion over the 2009-2019 period.

Additionally, in a January 14 letter to Budget Committee Ranking Member Rep. Paul Ryan (R-WI), CBO Acting Director Robert A. Sunshine noted that the CBO also estimated that the cost of "funding increases" in H.R. 2 would be "offset by increases in federal tax revenues" if the provisions included in the bill were continued through 2019:

The introduced version of H.R. 2 would authorize CHIP through 2013 and would provide significant funding increases over the next few years, leading up to a total funding level of $17.4 billion in 2013. The program's funding for the second half of fiscal year 2013 would be $3 billion. Under baseline rules, that amount annualized -- $6 billion -- would be projected for each subsequent year. The estimated cost of the bill assumes that funding level for CHIP for fiscal years 2014 through 2019. On that basis, CBO estimates that the introduced version of H.R. 2 would increase federal direct spending by $73.3 billion through 2019, including the costs of other provisions in the bill. (That spending would be offset by increases in federal tax revenues totaling $73.6 billion over the same period, primarily from increases in the excise taxes levied on tobacco products.)

Sylvester also uncritically aired Boehner's statement that "no verification system to speak of is contained in the bill." She did not explain that H.R. 2 would provide an "Alternative State Process for Verification of Declaration of Citizenship or Nationality for Purposes of Eligibility for Medicaid," under which individuals could prove their eligibility by providing their name and Social Security number to state officials, rather than by providing "documentary evidence of citizenship or nationality." Specifically, applicants' Social Security numbers would be checked against "records maintained by the Commissioner [of Social Security]" and, in the case of unresolved "inconsisten[cies]," individuals could ultimately be "disenroll[ed] ... from the State plan." From H.R. 2, Subtitle B, Section 211:

SEC. 211. VERIFICATION OF DECLARATION OF CITIZENSHIP OR NATIONALITY FOR PURPOSES OF ELIGIBILITY FOR MEDICAID AND CHIP.

(a) Alternative State Process for Verification of Declaration of Citizenship or Nationality for Purposes of Eligibility for Medicaid-

(1) ALTERNATIVE TO DOCUMENTATION REQUIREMENT-

[...]

"(ee)(1) For purposes of subsection (a)(46)(B)(ii), the requirements of this subsection with respect to an individual declaring to be a citizen or national of the United States for purposes of establishing eligibility under this title, are, in lieu of requiring the individual to present satisfactory documentary evidence of citizenship or nationality under section 1903(x) (if the individual is not described in paragraph (2) of that section), as follows:

"(A) The State submits the name and social security number of the individual to the Commissioner of Social Security as part of the program established under paragraph (2).

"(B) If the State receives notice from the Commissioner of Social Security that the name or social security number, or the declaration of citizenship or nationality, of the individual is inconsistent with information in the records maintained by the Commissioner--

"(i) the State makes a reasonable effort to identify and address the causes of such inconsistency, including through typographical or other clerical errors, by contacting the individual to confirm the accuracy of the name or social security number submitted or declaration of citizenship or nationality and by taking such additional actions as the Secretary, through regulation or other guidance, or the State may identify, and continues to provide the individual with medical assistance while making such effort; and

"(ii) in the case such inconsistency is not resolved under clause (i), the State--

"(I) notifies the individual of such fact;

"(II) provides the individual with a period of 90 days from the date on which the notice required under subclause (I) is received by the individual to either present satisfactory documentary evidence of citizenship or nationality (as defined in section 1903(x)(3)) or resolve the inconsistency with the Commissioner of Social Security (and continues to provide the individual with medical assistance during such 90-day period); and

"(III) disenrolls the individual from the State plan under this title within 30 days after the end of such 90-day period if no such documentary evidence is presented or if such inconsistency is not resolved.

CBO also outlined the bill's "alternative citizenship verification process" in its cost estimate:

Verification of Declaration of Citizenship or Nationality for Purposes of Eligibility for Medicaid and CHIP. The bill would provide an alternative citizenship verification process for states when determining Medicaid eligibility. Instead of presenting satisfactory documentary evidence as required under the Deficit Reduction Act of 2005, states could submit the name and Social Security number of the individual to the Commissioner of Social Security. The Commissioner would then determine whether the name and Social Security number provided by the state is consistent with information in the records maintained by the Commissioner. If the information is not consistent, the state would make a reasonable effort to address the causes of the inconsistency. If the inconsistency cannot be resolved, the individual would be disenrolled from the program. The bill also would apply the verification process to the Children's Health Insurance Program.

The new SCHIP bill also explicitly states in Section 605 that "[n]othing in this Act allows Federal payment for individuals who are not lawfully residing in the United States":

SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS.

Nothing in this Act allows Federal payment for individuals who are not lawfully residing in the United States. Titles XI, XIX, and XXI of the Social Security Act provide for the disallowance of Federal financial participation for erroneous expenditures under Medicaid and under CHIP, respectively.

From the January 14 edition of CNN's Lou Dobbs Tonight:

DOBBS: The House of Representatives today voted, as expected, to expand the children's health insurance program known as SCHIP. The program is designed to give health coverage to lower-income children whose families can't afford it. But some Senate Republicans say that the new law expands coverage to more than half-a-million illegal aliens. We'll have that report exclusively here tonight. Lisa Sylvester has the story.

[begin video clip]

SYLVESTER: The vote in the House, 289 to 139. The legislation would enroll 4 million more low-income children in the state-administered health program known as SCHIP.

REP. HENRY WAXMAN (D-CA): This bill is a down payment -- a down payment on health care for all Americans.

SYLVESTER: Democrats passed similar legislation in the last congress, but the bills were vetoed by President Bush. Now, with a Democratic president moving into the White House, congressional Democrats are expecting a different outcome.

REP. NANCY PELOSI (House majority leader): At a time of economic crisis, nothing could be more essential than ensuring that children of hard-working families receive the quality health care they deserve.

SYLVESTER: But conservatives on the Hill are blasting the bill, charging that the legislation will make it easier for illegal aliens to receive government-paid health insurance.

REP. JOHN BOEHNER (House minority leader): The whole verification process that should be in here to ensure that only American citizens and legal residents are entitled to these benefits ... no verification system to speak of is contained in the bill.

SYLVESTER: Fiscal conservatives take issue with the price tag and argue a proposed 61-cent federal tax on cigarettes will not generate enough revenue to pay for the program, estimated to cost at least $32 billion in the first 4 1/2 years.

REP. JIM DeMINT (R-SC): They're throwing around money around here like it's Monopoly money. You know, we're talking about the $700 billion and we're talking about this new money, and we did a lands bill for $12 billion. I'm afraid we're doing a lot to hurt future of our country.

[end video clip]

SYLVESTER: And now that the SCHIP legislation has passed the House, it heads to the Senate. The House bill also contains language that would allow children of legal immigrants to receive benefits, even if they've been in the country less than five years. Now, the Senate bill does not include that language, but it is expected an amendment will be introduced. A Senate vote could happen within the coming days, and President-elect Obama has indicated he will sign the legislation -- Lou.

DOBBS: Well, I mean, there's no surprise in that. I suppose that it is becoming increasingly clear to every American, irrespective of their ideological viewpoint, their partisan view, whether Republican or Democrat, independent, that we're at a new stage in this country's existence. There is no moral imperative whatsoever in Washington, D.C., to constrain spending.

I mean, if we can give trillions of dollars to our banking industry, to Wall Street, billions upon billions of dollars to support retention bonuses, why in God's name is there any moral -- moral resistance of any kind that is legitimate, any intellectually consistent argument, against paying for health care for anyone in this country, whether legal or illegal?

SYLVESTER: Yeah, you know, and that's the point that Senator DeMint made, which is $35 billion, under normal circumstances, that is a huge amount of money. But in light of $700 billion here, $350 billion here, he says they're willing to pass this amount of $35 billion without even sneezing at it because, comparatively, it's not that -- considered not that significant of a sum, Lou.