I have to offer a different opinion on the higher power scope for the .223. If you have good optics on your higher power scope, it will work fine. One of the bad characteristics of inexpensive optics is they tend to offer a rather dim view on the higher powers. This is true for all optics, but to a greater degree with the low end products. I've got a 5-20x40 Tasco EuroClass, Japan built by LOW scope on my .223 and it is bright pretty much throughout the power range, dims slightly on 18x-20x but is still plenty useful even under overcast skies, which living here in the pacific NW, I know plenty about! I also have a Mueller Eraticator 8.5-25x50IGR on my .243 Ultra Varmint, it's also plenty bright under all conditions, but it has a 50mm objective which on a handi isn't an issue due to the need to mount higher for hammer clearance.
If you're just shooting Varmints or even coyotes, the .223 has plenty of power for killing at ranges well beyond 250yds, specially shooting the win white box 45gr JHP which is unanimously selected as the best shooting ammo in general for the .223 H&R rifles. With a 200yd zero, it is only 1.2" high at 100yds, and 6.7" low at 300yds with a retained energy of 434 ft/lbs.
Rifle Ballistics
Distance (yds) Muzzle 50 100 200 300 400 500
Velocity (fps) 3600 3307 3033 2533 2084 1687 1355
Distance (yds) Muzzle 50 100 200 300 400 500
Energy (ft. lbs.) 1295 1093 919 641 434 284 183
Distance (yds) 50 100 150 200 250 300
Short Trajectory (in.) -0.4 0 -0.6 -2.3 -5.4 -10.1
Distance (yds)100 150 200 250 300 400 500
Long Trajectory (in.) 1.2 1.1 0 -2.5 -6.7 -21.4 -48.7
http://www.winchester.com/products/catalog/cfrdetail.aspx?symbol=USA2232F&cart=MjIzIFJlbWluZ3Rvbg==&bn=4