COLUMBIA, S.C. - One day after the Senate approved a dismal $5 billion state budget that included deep cuts for health and education programs, the federal government approved aid for states, including $68 million this year for South Carolina.

The "timing is absolutely incredible," said House Speaker David Wilkins. A panel of six lawmakers will be appointed next week to work out differences between the House and Senate versions of the budget bill.

Included in the federal government's $20 billion aid package for states will be $136.4 million for South Carolina in the next 18 months in direct aid that can be used at the state's discretion, said U.S. Sen. Lindsey Graham, R-S.C. The state also will get $129.1 million in the next 18 months to help fund the ailing Medicaid program, Graham said.

The aid was part of $330 billion in new tax cuts approved Friday by Congress. President Bush was expected to sign the bill.

The aid comes as lawmakers have been debating an increase in the state cigarette tax supported by Gov. Mark Sanford. Sanford wanted a 53-cent-a-pack increase, which would have raised $171 million for Medicaid programs, and a reduction of income taxes to 5 percent from 7 percent over several years.

"My hope is that this money coming to South Carolina will help substantially alleviate the need for any major tax increase and that way the taxpayer truly gets the benefit of the reduction at the federal level," Graham said.

The state's Medicaid program has been underfunded. Senate Finance Committee Chairman Hugh Leatherman, R-Florence, warned senators Thursday that without an increase in Medicaid funding, people would lose nursing home care and home-based services and thousands would be cut from the SilverCard prescription program.

The federal funding temporarily eases those concerns. But Sanford warned Friday that the state is receiving one-time money, and lawmakers still need to address future funding through tax reform.

"Too often in the political process you find that the short-term removal of a certain amount of pressure leads to the abandonment of the long-term pursuit of change," Sanford said. "We can't let that happen - particularly now that we're having a much-needed debate as to how we tax and spend as a state."

The federal funds also will be a shot in the arm for the state's schools. The House and Senate budgets provide just $1,643 per student for public schools - the lowest level since 1995. The state Education Department says $2,201 per student is needed.

Leatherman and House Ways and Means Committee Chairman Bobby Harrell, R-Charleston, agree that education funding is a top priority, along with Medicaid.

That's good news for schools.

"Restoring those cuts to the base student costs would be the quickest way to send some relief to schools," said Education Department spokesman Jim Foster. "It won't come close to making up all the funding that's been cut from schools. But right now, even a little piece of a life preserver looks pretty darn good."