It's not just SCHIP. The White House is now opposing other popular domestic spending measures (as reported here), in what is being described as an effort to reassert his conservative credentials in time for the 2008 election. In the NY Times story linked above, for example, reporter Carl Hulse floats the theory that "Mr. Bush and Republican leaders are taking a harder line on spending out of a belief that voters in 2006 punished them for allowing federal spending to creep upward in the last six years and creating a costly new Medicare drug benefit."
That's one theory, I suppose, but here's another (mine): The Medicare drug benefit was moderately popular, earning Republicans at least as many votes from moderate/elderly voters as it cost them with conservative deficit hawks. Bush scores almost no points as a deficit hawk because, in light of the cost of the Iraq war, the domestic programs he wants to cut are far too little too late to appease any serious fiscal conservative who votes on such issues. Bush's current desires to keep down taxes on the wealthy, while spending lavishly (in blood and treasure) on a misbegotten foreign policy adventure, and nickeling and diming the nation's needy, all come from his core ideological commitments and are politically costly. The administration's earlier willingness to go along with modest growth in domestic budgets and even to support some costly new programs were politically driven. But with Karl Rove no longer in the White House to keep Bush focused on the politically popular rather than simple conservative ideology, the President has reverted to his own ideological instincts.
I realize that many people (including me on occasion) have described Rove's master strategy as polarization and base mobilization, but that was never the whole of it. Rove was always willing to try to appeal to swing voters with baubles (like health care!) if he thought that the benefit outweighed the cost with core conservatives.
Posted by Mike Dorf