President Obama signed legislation on Wednesday extending health insurance to millions of low-income children

Visit msnbc.com for Breaking News, World News, and News about the Economy

By KEVIN FREKING and PHILIP ELLIOTT, Associated Press Writers Kevin Freking And Philip Elliott, Associated Press Writers 1 hr 59 mins ago

WASHINGTON – President Barack Obama on Wednesday signed a bill extending health coverage to 4 million uninsured children, a move he called a first step toward fulfilling a campaign pledge to provide insurance for all Americans. It was a victory for Obama a day after his nominee to shepherd his broad health care agenda stepped aside amid tax problems.

Obama used an ebullient East Room signing ceremony to continue his push for his plan that would provide universal health insurance, even as he spent much of the previous day admitting he "screwed up" in naming former Sen. Tom Daschle to spearhead the health care overhaul. He wrapped the signing event in another pitch for his separate $819 billion economic plan that now is under consideration in the Senate and faces Republican opposition.

"As I think everybody here will agree, this is only the first step," Obama said of the bill that reauthorizes the State Children's Health Insurance Program.

"Because the way I see it, providing coverage to 11 million children through CHIP is a down payment on my commitment to cover every single American," he said to applause before turning to the economic recovery bill.

"It won't be easy; it won't happen all at once," Obama said. "But this bill that I'm about to sign, that wasn't easy either."

Obama and his advisers see the economic crisis as his window to push through many of his campaign pledges. Renewable energy, financial regulation and even rural Internet access all have been tied to repairing the nation's fractured economy. In the process, Obama has exposed his plan to criticism and questions that threaten to jettison the first major legislation his team has assembled.

"I refuse to accept that millions of our children fail to reach their full potential because we fail to meet their basic needs. In a decent society, there are certain obligations that are not subject to trade-offs or negotiations, and health care for our children is one of those obligations," Obama said, signaling he was readying for a fight.

Obama has faced a difficult week, his second full one in office. Daschle, the former Senate Democratic leader, withdrew his nomination as secretary of health and human services after acknowledging he failed to pay taxes on a car and driver provided by a Democratic fundraiser. His departure also left in the president's team a large gap for someone to usher through sweeping reform Obama has promised.

The children's health bill calls for spending an additional $32.8 billion on SCHIPI, which now enrolls an estimated 7 million children. Lawmakers generated that revenue by raising the federal tobacco tax.

Health officials project that there are about 8 million to 9 million uninsured children in the United States.

The bill went to the White House fresh from passage in the Democratic-controlled House, on a vote of 290-135. Forty Republicans joined in approval.

Most Republicans, though, criticized the cost of the legislation. They also said it will mean an estimated 2.4 million children who otherwise would have access to private insurance will join the State Children's Health Insurance Program instead.

"The Democrats continue to push their government-run health care agenda — universal coverage, as they call it," said Rep. Pete Sessions, R-Texas.

The bill's passages has long been a top priority of Democratic lawmakers. In late 2007, President George W. Bush twice vetoed similar bills. The Senate passed the same bill last week. Obama made it a top priority in his first 100 days and one step in his push for universal coverage by the end of his first term.

"President Obama and Congress are demonstrating that change has come to Washington, and we are moving forward to improve the quality of life for American families struggling during these hard times," said Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee.

SCHIP was created more than a decade ago to help children in families with incomes too high to qualify for Medicaid but too low to afford private coverage.

Federal money for the program was set to expire March 31, barring action by Congress. To cover the increase in spending, the bill would boost the federal excise tax on a pack of cigarettes by 62 cents, to $1.01 a pack.

Opponents of the bill complained that the tobacco tax increase hits the poor the hardest, because they are more likely to smoke than wealthier people. Many also took exception to expanding the program and Medicaid to children of newly arrived legal immigrants.

Republicans said that they supported SCHIP and providing additional money for the program. However, they argued that Democrats were taking the program beyond its original intent and encouraging states to cover middle-class families who otherwise could get private insurance.

"This debate is about, do we want a children's health insurance program that covers every child in America with state and federal dollars regardless of their ability to pay?" said Rep. Joe Barton, R-Texas. "Do we want to freeze out the private sector for health insurance?"

But supporters said that ensuring children had access to adequate health care was a matter of priorities. Rep. Frank Pallone, D-N.J., said an estimated 4 million people have lost employer-sponsored insurance in the past year.

"Do they keep their families' health insurance or do they put food on the table at night? During this economic recession, these kinds of decisions are unfortunately becoming more common," Pallone said.