WASHINGTON (MarketWatch) -- The U.S. House passed an expansion of the State Children's Health Insurance Program Thursday evening, despite a new veto threat and continued opposition from many Republican representatives.

House lawmakers voted 265-142 to approve the new plan, known as SCHIP. If President Bush carries through with his threatened veto, and precedent indicates that he would, then the tally would fall short of the two-thirds majority needed to override.

Bush criticized the new SCHIP plan, saying that it doesn't meaningfully address prior objections. The revision still calls for an increase in tobacco-product taxes to fund a $35 billion expansion over SCHIP's current $25 billion five-year funding baseline. A current extension of SCHIP expires in mid-November.

"Of course [the president] would veto it," said Tony Fratto, a White House spokesman. "In some ways, this bill is worse than the previous bill. It raises taxes on working Americans to move people from private insurance to public assistance. No tax increase of any kind is needed to fund this program."

The revised plan cuts off eligibility for children in families making more than three times the federal poverty level, with the exception of New Jersey's grandfathered state plan. That puts the threshold this year at about $62,000 for a family of four. Bush has said SCHIP should focus on families earning less than double the federal poverty line.

“ 'In some ways, this bill is worse than the previous bill. It raises taxes on working Americans to move people from private insurance to public assistance.' ” — Tony Fratto, White House spokesman

The president has said that he would be willing to sign a bill with a larger expansion than the $5 billion he proposed. However, he has criticized an expansion that would be a "step toward federalization of health care."

Aiming to pacify GOP lawmakers, the revision would tighten income-eligibility levels, speeds the elimination of coverage for childless adults and strengthens citizenship verification requirements.

Last week, the House failed to override Bush's veto of the earlier SCHIP bill, missing the two-thirds majority needed with 273 voting to override and 156 against. See full story.

Democrats hope that the revised bill will gain support from some lawmakers who may be closer to the fence. Speaker Nancy Pelosi, D-Calif., said Wednesday evening that the revised bill addresses all of the concerns expressed by Republicans and the president.

"It clarifies the language on the claim that was made that people making $83,000 a year could receive SCHIP -- that was patently not true, and it is clarified in the legislation that it is not so," she added.

The bill is also explicit in stating that illegal immigrants aren't eligible for federal funding. Further, adults without children will be phased out of the program over one year, rather than the previously proposed two years.

Senate Finance Committee Chairman Max Baucus, D-Mont., supports the revision.

"We've addressed the concerns raised by many who voted against the original SCHIP reauthorization bill, and the result is strong legislation that ought to garner even broader, more bipartisan support," he said.

House Minority Whip Roy Blunt, R-Mo., said that Pelosi should have delayed the vote on SCHIP due to the fires in California. There were at least seven representatives in California, absent from the vote, that would have been "no" votes, according to a spokesman for Blunt.