Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, urged the president to support the committee's proposal, which he said would keep health coverage for 6.6 million children currently covered by the plan and reach 3 million more low-income, uninsured children over the next five years.

"Members of Congress have decided, however, to expand the program to include, in some cases, up to families earning $80,000 a year — which would cause people to drop their private insurance in order to be involved with a government insurance plan," Bush said in a speech in suburban Maryland.

"If Congress continues to insist upon expanding health care through the SCHIP program — which, by the way, would entail a huge tax increase for the American people — I'll veto the bill," he said.