From today’s Kaiser Health Policy Report. Good news. Congressional leaders are already working hard on how to pay for a robust reauthorization of the State Children’s Health Insurance Program (SCHIP), ignoring the miserly number included in Pres. Bush’s FY08 budget proposal. SCHIP faces the “pay-go” challenge — money to pay for reauthorization must be found in savings or new revenues:

A bipartisan group of lawmakers led by Reps. Rahm Emanuel (D-Ill.) and Ray LaHood (R-Ill.) on Friday announced a proposal that would extend health insurance to an additional nine million U.S. children. The Healthy Kids Act of 2007 would authorize $50 billion over five years to expand SCHIP and Medicaid. In addition, the proposal would provide refundable tax credits to help families with annual incomes of as much as 350% of the federal poverty level purchase health insurance, provided that they are not eligible for SCHIP. The tax credits would cost an estimated $10 billion over five years. The proposal also would increase federal matching funds for states that revise their SCHIP and Medicaid programs to help ensure eligible families enroll and remain enrolled in the programs. The lawmakers modeled the proposal, which they have not introduced as legislation, after a plan recently released by a broad coalition that includes America’s Health Insurance Plans, Families USA and the U.S. Chamber of Commerce.

According to Emanuel, Congress could offset the cost of the proposal through legislation (HR 878, S 601) that would improve collection of capital gains taxes. Emanuel estimates that U.S. residents underpaid the federal government in capital gains taxes by $17 billion in 2005. He said, “If people pay their fair share, then children can get their fair share”. Emanuel hopes to include some parts of the proposal in legislation to reauthorize SCHIP that House Energy and Commerce Chair John Dingell (D-Mich.) plans to introduce this spring. Sen. Richard Durbin (D-Ill.) has agreed to introduce the proposal in the Senate and attempt to find a Republican co-sponsor.