Kids and states receive a break.

• Position: TRENDS AND TRANSITIONS - Deficit Reduction Act of 2005

At least 12 states and five territories with anticipated short-falls in their State Children's Health Insurance Program (SCHIP) will get a break this year under provisions of the Deficit Reduction Act of 2005. This one-year $283 million windfall will help continue coverage for low-income children who may have lost it otherwise because the SCHIP law caps each state's allotment. If states use their full allotments, they may be eligible for additional funds under a redistribution process determined by the secretary of Health and Human Services, based on unused funds from other states.

States have three years in which to spend each year's SCHIP allotment. At the end of that period, many states have unspent funds, which are then redistributed to those that have exhausted their allotments.

This year's anticipated surplus for redistribution, however, was only $173 million, far short of the estimated $456 million needed to close the shortfall gap among states and territories. (This year's $283 million reallocation is of unused funds earmarked for states in 2003.)

To avoid interruption in access to health care, the Bush administration asked Congress for additional funds, which were granted as part of the Deficit Reduction Act the president signed into law in...