The White House is seeking to cut funding from the Children’s Health Insurance Program, known as CHIP, as part of its larger request for cuts to the federal budget in a rescissions package sent to Congress this week.
The request from President Donald Trump includes a $7 billion cut to the popular program, part of $15 billion in overall cuts. Some $2 billion would come from a contingency fund that was created to prevent states from running out of money, with the rest coming from funding that Congress has authorized for the program but states haven’t spent.
The administration defended the cuts, telling reporters Monday the money would come from untapped leftover funds and wouldn’t affect operations at CHIP or in other health care areas.
“This is money that was never going to be spent,” said one official.
The request is part of the administration’s efforts to “rein in out-of-control federal spending,” per a White House statement, something Trump railed against on the campaign trail as he promised to “drain the swamp.” His rival, Hillary Clinton, campaigned in 2016 on her advocacy for the bill while first lady.
While it’s unlikely that the package will pass Congress in the midterm election year, Trump’s move opens some painful wounds for Congress. Lawmakers recently struggled for months to fund the program that is highly valued by parents and by officials on both sides of the political aisle.
CHIP covers about 9 million children whose parents usually earn too much to qualify for Medicaid, but not enough to afford private health coverage — typically no more than $62,000 for a family of four. The 20-year-old program is paid for almost entirely by the federal government.
But CHIP got caught up in the battle to fund the federal government last fall. Congress failed to reauthorize a long-term appropriation for it for months after its funding ended on September 30. Lawmakers were at odds over how to pay for it.
States began warning that children would lose their coverage if lawmakers didn’t act fast. Parents pleaded with Congress to keep their children insured. And even Jimmy Kimmel urged Americans to tell their representatives to fund the program.
Congress finally passed a six-year extension of CHIP funding on January 22 and then added another four years in a February budget deal.
A Congressional Budget Office analysis earlier this year showed that funding CHIP for 10 years would save the federal government $6 billion over 10 years.