Bush vetoes popular bill on kids' health care

(Adds timing of House override, reaction 13-15)

By Caren Bohan

WASHINGTON, Oct 3 (Reuters) - U.S. President George W. Bush on Wednesday vetoed a measure to expand a popular children's health care program, launching the first in a series of major battles with Democrats over domestic spending.

The legislation had bipartisan support in the U.S. Congress and the veto risks angering many Republicans who fear the issue could hurt their party in the 2008 elections.

Democrats called the veto "cruel" and "heartless." The measure would have provided an extra $35 billion over five years for a health program for low-income children. Cigarette taxes would have been raised to fund the expansion from the current $25 billion level.

Supporters of the bill said the extra money would have helped provide health coverage for 10 million children.

While defending his veto, Bush offered to negotiate with Democrats on the program's funding. He had initially proposed a $5 billion increase in funding over five years, a rise that critics said would be insufficient to cover the children currently in the program because of rising health care costs.

"If they need a little more money in the bill to help us meet the objective of getting help for poorer children, I'm more than willing to sit down with the leaders and find a way to do so," Bush told a business forum in Lancaster, Pennsylvania.

He said the bill's funding level would have expanded the health program beyond its original intent and taken a step toward government-run health care.

"The policies of the government ought to be to help people find private insurance, not federal coverage," Bush said.

"I happen to believe that what you're seeing when you expand eligibility for federal programs is the desire by some in Washington, D.C. to federalize health care. I don't think that's good for the country," he added.

Democrats vowed to try to override the veto and Senate Democratic Leader Harry Reid of Nevada said the veto showed Bush had "turned his back on America's children."

"Today the president showed the nation his true priorities: $700 billion for a war in Iraq, but no health care for low-income kids," added Rep. Rahm Emanuel, an Illinois Democrat. "Millions of American children and their families won't forget that they are on the bottom of the president's priority list."

The Senate overwhelmingly backed the health legislation. But, the margin of support in the House of Representatives fell short of the two-thirds majority that would be needed to override a presidential veto.

House Democratic leaders plan to put off the override vote until Oct. 18, giving supporters time to persuade more Republicans to switch their votes. The Democratic Party plans television ads attacking Republicans over Bush's veto.

Rep. Jim McCrery, a Louisiana Republican, said the delay was a "cynical" effort by Democrats to "politicize" the issue.

But Republican Sens. Charles Grassley of Iowa and Orrin Hatch of Utah, who helped negotiate the bipartisan legislation, plan to use the time to contact House Republicans in an effort to win a veto override.

Bush's Republican supporters say they are confident they have the votes in the House to prevent an override.

The veto came as a Washington Post-ABC News poll showed more than seven in 10 Americans supported the $35 billion increase proposed under the bill. By contrast, the same poll showed many wanted to see a reduction in Bush's spending proposal for the Iraq war.

Bush, with just under 16 months left in office, has also threatened to veto a series of annual funding bills to keep domestic spending within his proposed limit of $933 billion.

The president is aiming to cast Democrats as fiscally irresponsible as he tries to shore up support from conservatives, many of whom are angry at Bush for allowing big spending increases during his first six years in office.

The rejection of the health bill marks the fourth veto for Bush since he took office in 2001. He twice rejected legislation on stem cell research and also vetoed an Iraq war supplemental spending bill because it included timelines for withdrawing troops. (Additional reporting by Tabassum Zakaria and Donna Smith)