...In the deadlock over the State Children's Health Insurance Program -- known in California as Healthy Families -- the administration wanted to focus on children in families making about $41,000 for a family of four, or about twice the federal poverty level. Congressional Democrats and some Republicans wanted to allow states to cover kids in families making up to $62,000, or three times the national poverty level.

Raising tobacco taxes to pay for the expansion had widespread support in Congress, although Bush was opposed to it. In its present form, the program covers some 6 million children whose parents earn too much to qualify for Medicaid, but too little to afford private coverage.

Back in the summer, some senior Republicans said they thought a deal was within reach.

Sens. Orrin Hatch of Utah and Charles E. Grassley of Iowa had helped write the Senate version of the bill, a political compromise that won a veto-proof majority in that chamber. Hatch suggested the dispute could be resolved as such things are routinely handled: by splitting the difference. And Grassley calculated that enough House Republicans could be persuaded to support the Senate version to overcome the president's opposition.

But the politics of the debate became too polarized, with Bush suggesting that one relatively small program for children could put the nation on a slippery slope toward government-run healthcare, and a parade of Democrats lining up to condemn the president as heartless.

Some Republicans blamed House Democratic leaders, who, unlike their Senate counterparts, decided to write a bill without consulting their GOP colleagues. Later, despite last-minute overtures, House Democrats were unable to secure enough Republican backing to override Bush's veto.

"I think it was an unfortunate lesson for the new leadership, that when you play politics with an important issue it might fall apart in the end," said Rep. Mary Bono (R-Palm Springs), who broke ranks with her party to vote for the legislation Bush vetoed.

But other observers -- noting the strong support for the children's program among Senate Republicans -- said the real political problem was division within the GOP.

They suggested the healthcare deadlock parallels the impasse earlier in the year over immigration reform.

"The debacle is not a partisan war between Democrats and Republicans over how to cover children, it's a civil war within the Republican Party over the role of government and health policy in general," said economist Len Nichols, director of the healthcare program at the New America Foundation.

"The right of the GOP carried the day because it had just enough votes in the House to sustain a veto. It may reflect the majority position among Republican primary voters, but it's hard to believe it's a majority position among the American people."

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