US President Barack Obama signed a bill extending medical care to an extra four million children, which he said was a "down payment" on his vow to guarantee health benefits to all Americans.

The legislation represents an early victory for Democrats in Congress and Obama's fledgling administration, and is similar to a bill twice vetoed by former president George W Bush.

It was also a timely boost for Obama's healthcare plans, the day after he lost Tom Daschle, the Washington veteran he had named to pilot his reforms but who had to step down over a controversy over late paid taxes.

"I refuse to accept that millions of our children fail to reach their full potential because we fail to meet their basic needs," Obama said before signing the State Children's Health
Insurance Program (SCHIP) legislation.

"In a decent society, there are certain obligations that are not subject to tradeoffs or negotiation health care for our children is one of those obligations," he added.

The House of Representatives passed the bill by a margin of 290-135 votes on Wednesday. It had already cleared the Senate.

The measure expands health care to an additional four million children over the next four-and-a-half years while continuing coverage for about seven million children already covered.