If Congress does not take action soon, nearly 630,000 children may lose their health care. Why? A funding shortfall in a quirky health care program called the State Children's Health Insurance Program (SCHIP). SCHIP was created in 1997 to shore up Medicaid. It covers children whose families have incomes that exceed Medicaid eligibility levels, but are still struggling to get by. This design has been remarkably successful- the share of low-income children who are uninsured has fallen by one fourth since 1997, despite a decline in employer-provided benefits. Hundreds of thousands of enrolled children may get cut off the program now, though, for two reasons:

Recently, defense contractor Lockheed Martin reported that it was making handsome profits at taxpayer's expense. In similar spirit, several pharmaceutical companies have reported huge profits as well, in part due to new business from the federal government. The now-online Medicare drug benefit, which does not let the federal government negotiate prices with drug companies, has provided much of the boost.

Another sign that the Bush Administration may push for "entitlement reform" (read: massive cuts to Social Security, Medicare and Medicaid) after the election. From CongressDaily ($$):

Via Kevin Drum, we may now know why CBO found an unexpected drop in Medicare spending this year. Actual spending hasn't gone down. Rather, the Bush administration is waiting until next fiscal year to pay some of its bills from this year. That way, some of the spending on services performed this year will get counted in the FY07 budget. And when the CBO puts out its FY07 budget projection, there'll be no pesky election to worry about. Here's an excerpt from a great article on the scheme, from Barron's (sub. req'd).