The Congressional Budget Office is warning that federal proposals to increase children's healthcare coverage will fall short of their goals because states would spend the money on hospitals, not kids.
The balanced-budget agreement reached between Congress and the White House calls for $16 billion in spending between 1998 and 2002 to expand coverage to at least half the nation's 10 million uninsured children.
To comply with the agreement, the House and Senate have each passed child-health initiatives in their balanced-budget packages.
But the CBO has estimated that, at best, the congressional proposals would get only roughly one-tenth of the way to covering 5 million children.
Congressional leaders, however, said they believe their estimates are right and the CBO's are wrong.
"Frankly, I think they're nuts," Senate Budget Committee Chairman Pete Domenici (R-N.M.) said of the CBO.
A Senate Budget Committee aide said it wasn't likely House and Senate negotiators, who are scheduled to begin meeting this week, would respond to the CBO's estimates by developing another plan as they hammer out a compromise between differing versions of budget legislation.
In both bills, the federal government would provide the money and leave it to the states to develop their own programs through Medicaid or another system.
But that flexibility is what the CBO points to when it makes its pessimistic coverage projections.
The budget office said it expects states to use their federal grants to replace $13.1 billion over five years in proposed reductions in Medicaid disproportionate-share payments to hospitals.
States, however, deny that charge. "CBO assumes the worst, assumes everyone is a bad actor," said one gubernatorial aide.