The House on Wednesday passed a major expansion of a government children's health program paid for by a cigarette tax increase, clearing the way for President Barack Obama's signature later in the day.

The bill renews the state children's health insurance program, or SCHIP, for four-and-a-half years and expands it to cover four million more children. The program, which now covers about seven million children, is set to expire March 31.

The bill is financed by an increase in tobacco taxes, including a 61-cent-per-pack increase in cigarette taxes that would raise the federal excise tax on a pack of cigarettes to $1.

Analysts expect the higher taxes on tobacco to reduce revenue at the three major U.S. cigarette makers, Altria Group Inc. (MO), Reynolds American Inc. (RAI) and Lorillard Inc. (LO).

Cigarette companies have already seen their volumes decline as they have been forced to increase prices to offset state taxes and their payments under a 1998 settlement agreement with states.

The SCHIP expansion would cost some $32.8 billion over five years, according to the non-partisan Congressional Budget Office.

The House voted 290-135 for the SCHIP expansion. The Senate passed the same bill last week.

An expansion of SCHIP, which covers mostly children in low-income families not covered by Medicaid, has been in Democrats' sights for years. But President George W. Bush vetoed the program's expansion twice.

"I can think of no higher priority than ensuring that children get the health care they need," said Rep. Janice Schakowsky, D-Ill.

"This represents a new direction, the beginning of the change that America's people voted for in the last election and that we will achieve with President Barack Obama," said House Speaker Nancy Pelosi, D-Calif.

Obama has scheduled a signing ceremony for the bill Wednesday afternoon.

Republicans opposing the bill protest that the measure would allow legal immigrants to access SCHIP, eliminating a current five-year waiting period in the law.

Some Republicans also have expressed concern that the expansion of SCHIP would "crowd out" the private insurance market, giving some middle-income families incentive to select a government program over private insurers.

"Why would you take someone who has private health insurance and move them to a government-run program?" asked Rep. Pete Sessions, R-Texas.

Supporters of the bill argue that insured families that might opt for SCHIP coverage have inadequate private insurance with high deductibles and little access to ongoing care.

-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com