IMPEACH BUSH

WASHINGTON — As they tell the story in Texas, when George W. Bush was governor, he fought hard to put austere limits on a new federal-state plan to provide health insurance for children of low-wage workers in the state. Outmaneuvered by Democrats, he corralled the program's chief sponsor on the statehouse floor and conceded defeat, saying, "You crammed it down our throats."

Now, almost 10 years later, President Bush is threatening to veto federal legislation that would renew the same partnership — the State Children's Health Insurance Program — and expand it to cover more of the nation's nearly 9 million uninsured children.

If he follows through on that threat, Bush could face a first in his presidency: a veto override.

The bill is considered Washington's most important legislation this year on health coverage.

And Bush's fellow Republicans are worried that Democrats may do more than back the president into a corner — they could use his opposition to tar GOP incumbents in next year's elections.

If the House and Senate approve the bill and Bush vetoes it, some Republicans say, there is a good chance that many in his own party would join with Democrats in overriding him.

Many Republicans are "very nervous," said Sen. Gordon H. Smith (R-Ore.), a supporter of a compromise formula that Bush opposes. "On the one hand, you've got the veto threat. On the other hand is the political importance of expanding healthcare for children. This is public policy broadly supported by the American people."

"I personally believe there is a reasonable chance he'll be overridden, but I don't want to make any predictions," said Sen. Orrin G. Hatch (R-Utah), one of the authors of the original program.

On Thursday, a 17-4 vote in the Senate Finance Committee to approve the compromise approach showed how unpopular Bush's position is in his own party. A majority of the panel's Republicans joined Democrats in voting to expand the program by $35 billion over five years, far more than the $5 billion in additional spending Bush has proposed.

"The president might be better off if Congress does deadlock over this," said G. William Hoagland, a former senior GOP budget aide in the Senate. "If they hand the president a bill, the risk of an override of his veto would be very high."

"A lot of states and a lot of Republicans are invested in this," said Hoagland, now a policy advisor to health insurer Cigna Corp. "I think this is a dangerous one for him."

At issue is a $5-billion-a-year program that covers about 6 million children whose parents earn too much to qualify for Medicaid, which helps the poor, but too little to afford private insurance. Known in California as Healthy Families, the program offers the states federal matching funds and flexibility to design their own programs.

Most have opted to cover children by enrolling them in private insurance plans.

The program was originally aimed at families making up to twice the federal poverty level, or about $40,000 today for a family of four.

But over the years, some states have taken advantage of the program's flexibility to cover children in families earning somewhat higher incomes, and others have even extended coverage to adults. Such changes have to be approved in Washington, and the Bush administration has signed off on the majority of them.

But now the administration is saying that's gone too far. Bush's advisors say the president strongly supports renewal of the program, but he wants it to return to its original intent of helping children — not adults — and confining it to those near the poverty line.

"We are ready to renew our commitment to low-income children today," said Health and Human Services Secretary Mike Leavitt. "But we cannot agree to a gradual government takeover of healthcare — and neither will the American people."

Some state officials say the administration is not offering nearly enough money to meet current commitments, much less help more children.

"The funding that was provided in the first decade when most of us were building our programs is simply not sufficient to continue," said Lesley Cummings, an administrator of California's program.

A recent study estimated about 200,000 children could be dropped from coverage in California under the president's plan, she said.

The funding increase in the Senate bill, to be paid for by a hike in tobacco taxes, is about seven times greater than what Bush has proposed.

The legislation would also allow states to cover children in families up to three times the poverty level, about $60,000, as Gov. Arnold Schwarzenegger has proposed. And it would take adults, except for pregnant woman in some states, off the program.

In the House, where work has yet to begin on its version of the bill, Democrats are taking a more expansive approach than in the Senate, adding more money for children's coverage and making changes in Medicare as well. The program's Republican supporters in the Senate say that would be unacceptable.

But Rep. Frank Pallone Jr. (D-N.J.), a leading Democrat in the House, said he wanted a bill that can pass Congress, not merely make a statement.

"We want to actually get something done," said Pallone, chairman of a subcommittee that will be writing the legislation.

Back in Texas, where Bush was governor in the early days of the program, former state Rep. Glen Maxey, a Democrat, said the president was "no friend of this program."

The initial allocation of federal funds for Texas would have supported coverage for 500,000 children, Maxey said. But Gov. Bush's first proposal called for covering only about 150,000, according to Maxey, who formed a legislative caucus to build support for covering the larger number.

The turning point was a 1999 committee vote in the Texas House, which signaled broad support for the more generous plan. Maxey said Bush later came up to him on the House floor, put his hands on his shoulders and conceded he had been outflanked.

Bush signed the bill and when he ran for president in 2000, cited it as an example of "compassionate conservatism."

"His example over and over again was that we covered every kid we possibly could in Texas," Maxey said.

ricardo.alonso-zaldivar@latimes.com