U.S. Senate approves children's health bill

By Donna Smith

WASHINGTON (Reuters) - The U.S. Senate approved legislation on Thursday expanding a popular children's health-care program, setting the stage for a fresh showdown with President George W. Bush, who vowed to veto the bill that would also raise tobacco taxes.

The Senate voted 64-30 for the bill that aims to provide health insurance to about 10 million children in low-income families unable to afford private insurance but who earn too much for the federal Medicaid program for the poor.

The bill would raise taxes on cigarettes and other tobacco products to help pay for the program. The bill goes to Bush who said he would veto it.

The White House said the Senate had passed another children's health bill with major flaws, despite the veto threat.

"Congress should address the serious flaws in this bill and produce legislation that puts poor children first and does not raise taxes," White House spokeswoman Dana Perino said in a statement.

The Senate acted after the bill was approved by House of Representatives last week in a 265-142 vote that was short of the two-thirds majority needed to overturn a veto by Bush.

Bush vetoed an earlier version of the bill that the House last month failed to override.

The bill would provide $60 billion in funding for the program over five years, compared with the current $25 billion five-year funding level. The tobacco tax increase, raising the tax on cigarettes by 61 cents to $1 per pack, would cover the added cost.