COLUMBIA, S.C. (AP) - The House agreed Wednesday with Senate plans to spend new federal money on Medicaid and public schools.

The money is part of a tax relief package that President Bush signed Wednesday. It allows the state to put $212 million into Medicaid programs and $20 million more into public schools. "It's manna from Washington," House Ways and Means Chairman Bobby Harrell, R-Charleston, said.

It was one piece of the Senate-amended budget that House members agreed with as they raced to complete work on the $5 billion spending plan before the June 5 adjournment.

The House killed a budget proposal that would raise the state sales tax by a half-cent on the dollar. Rep. Joel Lourie, D-Columbia, said that would generate $271 million. That's enough to lift per-pupil spending $2,200 and head off projected layoffs of more than 6,000 teachers.

"If we're going to commit to public education, let's step up to the plate," Lourie said.

"We are sprinting for last" in public education, House Minority Leader James Smith, D-Columbia, said as he argued for the tax increase.

The House was expected to finish the budget later Wednesday night and send the bill back to the Senate.

Senate Finance Committee Chairman Hugh Leatherman said he hoped members of a budget conference committee could be appointed this week to work out differences in the two versions of the budget bill.

The panel would have to work quickly to avoid extending the legislative session. But Senate President Pro Tem Glenn McConnell said that may be necessary anyway to deal with Gov. Mark Sanford's budget vetoes.

In the Senate, debate continued on a cigarette-tax increase. Raising the tax to 60 cents a pack from 7 cents would raise $171 million, supporters say. But the plan has been held up by Sen. Jake Knotts, R-West Columbia.

"It's taking money out of the economy," Knotts said. "You cannot continue to raise taxes in bad times. People need the money to put back into the economy."

But supporters say the money is critical to providing a stable funding source for health care programs for the elderly and the poor. "This should be the test that people of South Carolina see that we mean business or we don't," said Sen. Tommy Moore, D-Clearwater.