Yesterday afternoon the U.S. House of Representatives attempted and failed to override President Bush's veto of a State Children's Health Insurance Program (SCHIP) bill by a vote of 273-156. Supporters needed 286 votes to override the veto. (Click here to see how your representative voted.)

As you know from reading past NACS Daily and NACS Magazine reports on this issue, the bill included a 61-cent-per-pack increase in the federal tobacco excise tax to pay for expanding SCHIP. After the president's veto and the House vote this week, it appears the administration and congressional leaders who support the bill are still far apart on a potential compromise, although there are reports that discussions will occur.

The main sticking points that create the biggest problem for a compromise include disagreements on the income eligibility threshold and an included ban on benefits for illegal immigrants.

Many Republicans and the administration want SCHIP to remain focused on children at or below 200 percent of the federal poverty level. These opponents of the program's expansion want states to focus on funding uninsured low-income children rather than those in families who are making $60,000 or more. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid are still adamant that any SCHIP package not deviate from the $35 billion expansion in cost for the program, which gives states additional flexibility to determine eligibility requirements.

Debate over SCHIP is now expected to go far into next year. In the interim, Congress is expected to temporarily extend the program.

NACS will continue to educate legislators that increasing excise taxes serves only to encourage consumers to seek illegal, tax-free sources for their cigarettes and threatens the safety of convenience store employees by increasing the incidence of cigarette theft.

Meanwhile, Congress is still looking for a way to move energy legislation. Pelosi has announced that she does not want to appoint conferees, but would rather work with Senate leadership to finalize legislation. Reid has indicated his desire to appoint conferees, but has expressed pessimism that Republican senators will allow him to do so. Consequently, he seems resigned to negotiations including only Democratic leaders.

The White House sent a letter to Pelosi outlining a "basic framework for an energy bill that would not compel the president's senior advisors to recommend a veto." The letter stated that such a bill would:

• Contain an ambitious alternative fuels standard comparable to the president's call for 35 billion gallons by 2017
• Reform and strengthen corporate average fuel economy standards
• Increase domestic energy production
• Not raise taxes or use taxes against any single industry
• Not contain language encouraging litigation against American businesses abroad
• Not impose gasoline price controls
• Not expand the Davis-Bacon Act wage requirements
• Not mandate a Renewable Portfolio Standard for electricity generation

To what extent this letter will influence discussions remains uncertain, but if the Congress wants to enact legislation, it must secure the president's approval.

NACS continues to meet with legislators to ensure that no retailer mandates are slipped into the legislation in the dark of night.

That's it from Washington. Have a great weekend!

John Eichberger
Vice President, Government Relations