President Obama yesterday signed into law an extension and expansion of the State Children's Health Insurance Program that increases the tax on cigarettes by 62 cents to $1.01 per pack. The action puts into question new tobacco bond deals that states want to back with consumption-based settlement payments from tobacco companies.
The House signed off by a vote of 290 to 135 on S-CHIP legislation providing the federally funded, state-run program about $33 billion of additional funding through 2013. The Senate voted Friday to approve the bill that originated in the House, and the president was expected to receive the bill this week after a final stamp of approval from the House on amendments added by the Senate. One Senate change raised the cigarette tax increase to 62 cents from 61 cents.