After a prolonged dead-lock between a bipartisan Congressional cohort and the White House over legislation on the popular State Children's Health Insurance Program (SCHIP), an agreement appears to have been reached. On December 18, 2007 the Senate passed revised legislation (S.2499) seeking to temporarily extend the program until March 2009 without raising taxes or extending services to additional populations beyond the original scope. On December 19, 2007 the House of Representatives passed the bill with a 411-3 vote. The White House has issued statements indicating that President Bush approves of the measure and intends to sign the bill.

Two prior bills were vetoed by President Bush. The first, H.R. 976 was vetoed on October 3, 2007 by the President, who cited discontent with the bill's costs and intentions (INPUT Blog: President Bush Keeps Promise to Veto SCHIP Bill). The second bill, H.R. 3963 was vetoed by President Bush on December 12, 2007, who cited the same concerns with the bill's tenants as with H.R. 976. The second bill passed through the House with a 265-142 vote, short of the two-thirds margin necessary to override the veto by President Bush. Minor changes were made to the original bill in order to win over hesitant Republicans. H.R. 3963 maintained increasing spending by $35 million for a total of $60 million over the next 5 years. In addition, the bill intended to fund the program via an excise tax on cigarettes would increase by 61 cents per pack. Both of these provisions were strongly opposed by President Bush. Modifications to the original bill, H.R. 976, were in regards to tightening eligibility, generally barring the use of the funds to provide services to illegal immigrants, childless adults and children of families exceeding three times the federal poverty level. The change in eligibility was to prevent concerns over a "crowd-out" effect in which families who could afford to use private insurance coverage would drop their plans in favor of federally funded coverage. The "crowd-out" effect was an additional concern of the White House. The revised Bill passed in the Senate, 64 yeas to 30 nays, and was subsequently vetoed by the president.

The lack of increased funding is disconcerting to states proposing expansion efforts; these efforts must now be carefully reassessed and potentially abandoned for the time being. In the past couple of years several states have begun to request financial bailouts after overextending the program beyond the federal statue's original intent. The Heritage Foundation reported that fourteen states experienced SCHIP funding shortfalls totaling $720 million in 2007. The Congressional Budget Office previously estimated that 43 states will experience shortfalls totaling $8.9 billion in 2017. SCHIP, along with Medicare, will likely be revisited as a crucial talking point for the 2008 presidential election.