Congress passes children health insurance bill

WASHINGTON (Reuters) - The Congress approved on Wednesday a bill expanding a health insurance program for children and raising tobacco taxes to pay for it, giving President Barack Obama a big legislative victory a day after his pick to lead a healthcare industry overhaul stepped aside.

The House of Representatives voted 290-135 for the $32.8 billion expansion of the State Children's Health Insurance Program, or SCHIP, which was approved by the Senate last week.

Democratic leaders are rushing the bill to Obama, who plans to sign it at a White House ceremony on Wednesday. Former Republican President George W. Bush twice vetoed similar legislation.

"Today, the objective of years of work will be substantially advanced. With this vote, and with President Obama's immediate signature, this bill will at long last be law," said House Majority Leader Steny Hoyer of Maryland.

The signing ceremony should provide a lift for Obama a day after he acknowledged mistakes in the handling of Tom Daschle's nomination as his point man to lead a broader overhaul of the $2.3 trillion U.S. healthcare industry.

Daschle, a former Senate minority leader, withdrew his name from consideration as secretary of health and human services because of tax problems.

The SCHIP program aims to help working families who cannot afford private health insurance but earn too much to qualify for Medicaid healthcare coverage for the poor. The additional money for the program will help states insure as many as 11 million children, compared with about 7.4 million currently enrolled in the program.

The bill includes a 61 cent per pack increase in cigarette taxes, bringing the total federal tax to $1 a pack. The tax on cigars and other tobacco products would also rise.

Republicans had criticized provisions in the bill that allowed states like New Jersey and New York to provide coverage for higher income families, some earning as much as $88,000. They also criticized a provision backed by Democrats that drops a ban on legal immigrants enrolling in the program until they lived in the United States for at least five years.

Republicans argued that lawmakers could have achieved their goal of providing healthcare for more low income children for less money. Despite those concerns, 40 Republicans joined the Democratic majority in backing the legislation.

(Editing by Mohammad Zargham)