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Federal Tobacco Tax Hike Could Pay for SCHIP
April 20, 2007

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Funding Tips & Trends 

A leading Democrat in Congress has proposed raising the federal tobacco tax to help pay for the State Children's Health Insurance Plan (SCHIP), the Kaiser Network reported April 19.

Rep. James Clyburn (D-S.C), the House Majority Whip, said that revenues from the tax increase could be used to offset a proposed $50-billion expansion of SCHIP. "Who would be hurt if we had an increase?" said Clyburn, whose district includes tobacco farmers who benefited from a $9.6-billion federal buyout in 2004. "The tobacco farmers got a great deal, so all we're talking about is people who choose to smoke cigarettes."

The Senate Finance Committee may include the proposed tax increase in its SCHIP legislation, according to committee chair Sen. Max Baucus (D-Mont.). However, the head of the House budget committee declined to comment on Clyburn's proposal, and powerful House Energy and Commerce Committee chair Rep. John Dingell (D-Mich.) said he preferred to pay for the SCHIP program by reducing funding for the Medicaid Advantage program.