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The Big Grab: Federal Policymakers Tap $3.5 Billion Set Aside for Kids' Health

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A few weeks ago, I went to pick up my three kids from their after-school science class only to find that one of my 8-year-old twins, Leo, had never shown up. I spent 20 panicked minutes frantically searching for him, reviewing in my head what I knew about child abduction rates (they are really, really low, right?) and the Amber Alert system. When he finally emerged from a nearby playground, sweaty and quite pleased with himself for a jump shot that he'd just made, I was flooded by relief and overjoyed to see him. Two minutes later, I was furious.

This chain of reactions is similar to what I experienced last week when I heard about the decision by the White House and congressional negotiators to take $3.5 billion out of funding that had been aside to reward states for covering uninsured low-income children. They did it as part of the deal to keep the federal government open through September 30, 2010. At first I was panicked -- what on God's earth did they just do? Then, after I was able to untangle what happened, I was deeply relieved -- no kids will be hurt because there is still enough money left in the child health performance fund to support coverage of children. But, ultimately, I was not pleased.

Here is a quick primer on the child health performance bonus fund. It was set up in February of 2009 when President Obama signed the Children's Health Insurance Program Reauthorization Act (CHIPRA) into law. The money is used to financially reward states that succeed in significantly increasing the enrollment of uninsured children into Medicaid. Right now, despite the high unemployment rate, loss of job-based health insurance, and growth in the number of uninsured adults, we've managed to drive the uninsured rate of children down to the lowest level on record. The bonuses have contributed by providing recognition and some modest financial help to states that are moving ahead to cover kids despite often-serious budget problems. This past year, 15 states were awarded a total of $206 million in performance bonuses, more than double the total award of $75 million in 2009.

The decision to tap $3.5 billion of the performance bonus fund was not a disaster in this instance, but only because there is enough money remaining in the performance bonus pool. By our calculations at Georgetown University's Center for Children and Families, all states could earn bonus payments in the years ahead and there would still be enough money in the fund to reward them. (For the budget gurus out there, the fact that enough money remains to reward all states is why the Congressional Budget Office does not treat the "grab" of the $3.5 billion as a real cut in federal spending, but that is a story for another day). Still, this does not make it a good idea to treat money that has been set aside for children's coverage as a bargaining chip in budget negotiations. It is a troubling precedent that could work out much worse in the next round of negotiations. As Bruce Lesley, President of First Focus has argued, the money should be protected and used for its intended purpose of strengthening child health coverage.

As I said to my son Leo after we made it safely home and I had calmed down, it may have worked out fine for you this time, but it was still a really risky decision and I don't want to see it happen again. If only members of Congress and leaders in the administration were as likely to be persuaded by my "tough mom" voice as my eight-year-old son.

This blog comes from MomsRising.org and CustomFitWorkplace.org. Each week it presents innovative ideas to strengthen 21st Century American families through public policies, business and workplace practices, and cultural change.

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