President Bush and Democrats are sparring once again over reauthorization of the State Children’s Health Insurance Program.

Democrats on the Senate Finance Committee want to use tobacco tax revenue to boost SCHIP funding $50 billion over 5 years.

Bush has proposed increasing SCHIP funding by $4.9 billion over 5 years, and to rein in some states’ efforts to expand the program to include low-income adults and moderate-income children.

Bush drew attention to the topic Wednesday by talking about SCHIP reauthorization at the White House.

If the Senate Finance Committee SCHIP reauthorization “proposal becomes law, S-CHIP would expand its reach to include children from family that earn as much as $80,000 a year, as well as some adults,” Bush said. “And as a result, many of these people would give up the private health insurance they have now as they move to government health care.”

The goal of advocates of expanding SCHIP and expanding Medicare “is to take incremental steps down the path to government-run health care for every American,” Bush said.

Instead, Congress should focus SCHIP on children in need and use tools such as health savings accounts, association health plans and restrictions on medical malpractice suits to make health insurance more affordable for all Americans, Bush said.

Bush also talked about the proposal he made during his State of the Union address to limit employer deductions for health insurance premiums and create a health insurance deduction for individuals, by creating a standard tax deduction of $15,000 for every family with private health coverage.

Bush said he would be willing to discuss creating a $5,000 tax credit rather than a $15,000 standard deduction.

If Congress created a private health insurance tax credit, low-income families with private health insurance could get the credit even if they owe little or no income tax, officials say.

SCHIP authorization now is set to expire Sept. 30.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, responded by saying that combining the effort to expand SCHIP “with controversial health care tax proposals” would not be a responsible path to take.

Congress should consider the Bush health insurance tax proposals separately from SCHIP reauthorization, Baucus said.

Baucus rejected the idea that SCHIP expansion would lead to government-run health care for all.

Today, 4 out of 5 states have a private-market component in their SCHIP plans, Baucus said.

“SCHIP is already setting a new example for health care policy, combining the best of public and private solutions,” Baucus said.