Senate Panel OKs Upping Tobacco Tax

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Senate Panel OKs Upping Tobacco Tax

WASHINGTON -- A Senate Committee yesterday brushed aside threats of a veto from President Bush and overwhelmingly approved the $35 billion expansion of a children's health insurance program and corresponding tobacco tax increases.

Under the proposed bill, which now heads to the full Senate, the federal tax on cigarettes would increase to $1.00 a pack from the current 39 cents. Taxes on other tobacco products would go up as well, with the tax on cigars rising to as much as $10 on a single premium cigar from 5 cents, currently, Reuters reported.

The Senate Finance Committee voted 17-4 in favor of the bill, which would ensure that health coverage continues for some 6.6 million children currently enrolled in the State Children's Health Insurance Program, known as SCHIP. It also would make about 3.2 million more children eligible for the program that is meant for low-income families unable to afford insurance, but who earn too much to qualify for Medicaid.

Senate Majority Leader Harry Reid, a Nevada Democrat, said the Senate would take up the legislation later this month despite the veto threat by Bush, who favors using tax breaks to expand health coverage to the uninsured, the report said.

"We are going to fight (for) this," Reid said. "This is important."

In Nashville, Tenn., yesterday, Bush reiterated his opposition to the bill, saying it would expand the government's role and undermine the private U.S. health care system.