From left to right: Sen. Max Baucus, D-Mont., House Speaker Nancy Pelosi, D-Calif., Sen. Jay Rockefeller, D-W.Va., Senate Majority Leader Harry Reid, D-Nev., and Rep. John Dingell, D-Mich. Source: The Swamp

Congressional Democrats on Tuesday conceded to Republican demands by postponing the $35 billion expansion of the State Children’s Health Insurance Program (SCHIP) until 2009. The Senate approved the extension Tuesday afternoon by unanimous consent, and the House is expected to offer its approval before the legislation ends this week.

Senate Finance Committee Chair Max Baucus, D-Mont., and ranking member Chuck Grassley, R-Iowa, on Monday agreed to a six-month reprieve for a 10 percent rate cut in Medicare physician fees, which was passed in the legislation on Tuesday, according to CQ Today. Doctors had warned that a cut in reimbursement rates would lead to physicians taking on fewer new Medicare patients. Instead, they'll get a 0.5 percent raise when they treat the elderly and disabled. The pay cut was scheduled to take effect Jan. 1.

SCHIP will continue to operate through March 2009 under the plan originally conceived by House Republicans and hashed out by the Senate Finance Committee and Senate leaders late Monday. The second version of the bill ruled out coverage of adults, made explicit that illegal immigrants would not be covered and offered a compromise on the income eligibility for the program.

The GOP stood fast against the Democratic bill, which received veto-proof margins in the Senate but came up about a dozen votes shy in the House, despite attracting some GOP support, reported The Hill.

Not only did the GOP prevent the Democrats from expanding the program, the minority party prevented the majority party from using an SCHIP vote and veto next fall as a wedge issue just before Election Day, according to The Hill.

As a result, proponents of expanding SCHIP might have to wait for the next president and the 111th Congress to get a result, which could be risky, since in 2009 SCHIP could well be subsumed by a much larger debate over the future of the U.S. healthcare system if the focus of the presidential candidates on health issues holds steady, The Hill reported. The measure is expected to sail through the Senate and the House and be signed by President Bush.

House Democrats are not walking away from SCHIP, said a spokesman for House Speaker Nancy Pelosi, D-Calif., and will vote on Jan. 23 to attempt to override President Bush’s second SCHIP veto.

The original 10-year authorization for SCHIP expired on Sept. 30 and since that time the program has been kept in place via continuing resolutions. The SCHIP bill headed toward passage includes new money intended to prevent states from experiencing budget shortfalls in their SCHIP programs.

In announcing the deal with his Republican counterparts, Finance Committee Chairman Max Baucus, D-Mont., expressed a commitment to returning to SCHIP next year. “The [S]CHIP extension in this bill will maintain health coverage for more than 6 million children who currently have it, but I will keep working to reach more low-income, uninsured American children through that vital program,” he said.

Finance Committee ranking member Chuck Grassley, R-Iowa, maintained that the lengthier SCHIP extension would actually help Congress tackle a larger bill in 2008. “The longer extension of SCHIP will allow Congress to enter the new year with a renewed focus on reauthorization while also providing funding certainty to states,” he said.

But, according to The Hill, the absence of a hard deadline could alleviate the pressure on lawmakers to return to SCHIP in earnest next year. Republicans in particular would stand to gain little by engaging in a re-run of this year’s political battle over the program with campaign season approaching.