New Jersey filed a federal lawsuit today charging the Bush administration is illegally trying to change the rules of a health insurance progam New Jersey and virtually every other state uses to provide coverage to 6.6 million children in working poor families.

The Bush administration's action constitutes "illegal rulemaking" and an "an arbitrary and capricious exercise" by the U.S. Department of Health because it imposes strict limits on the state's implementation of the program, according to a copy of the New Jersey lawsuit filed this morning.The lawsuit injects New Jersey into a national fight over funding for the states' Children's Health Insurance Program, a Clinton-era effort to provide insurance to children in working families who made too much money to qualify for Medicaid but were not covered by private insurance through their work.

"This same Administration previously signed off on our decision to cover the 10,000 kids they are now seeking to kick out of SCHIP, and the lawsuit we filed today demonstrates that we will simply not let that happen," Corzine said.

The lawsuit said the imposition of "the illegal benchmarks ... would be devestating to the thousands of innocent children in New Jersey and nationwide," saying they would lose or be denied health insurance coverage.

Congress has reauthoritzed the $35 billion program, but President Bush has said he will veto the bill.

Corzine said last week the federal limits on the program, called Family Care in New Jersey, would cost the state as much as $70 million. He said it is "morally reprehensible to turn children lose from this program."

The filing of New Jersey's lawsuit comes on the same day that seven other states announced they would pursue legal challenges to the Bush Administration's directive. Those states are Arizona, California, Illinois, Maryland, New Hampshire, New York and Washington.