Congress has confronted similar situations before. As part of the Deficit Reduction Act signed into law earlier this year, it allocated $283 million to help 12 states that overspent their allocations last fiscal year.
But the fix for the current fiscal year poses new problems. Most importantly, Congress faces reauthorizing the entire S-CHIP program in 2007. While the program remains popular on Capitol Hill and in statehouses, the recurring financial shortfalls will need to be addressed when the program is renewed.
While some would point to this as a caution against overspending, Pennsylvania lawmakers instead decided that we needed our own expansion of the S-CHIP program when they passed Governor Rendell’s “Cover All Kids” initiative in a late night session.