WASHINGTON (Reuters) - Republican lawmakers on Wednesday attacked an Obama administration proposal for limiting food advertising to children even as the team behind the plan offered concessions to food and beverage makers.

Fred Upton, chairman of the Energy and Commerce Committee in the House of Representatives, attacked the Interagency Working Group for failing to produce a study it was asked for and instead proposing last April voluntary limits on food advertisements to children.

"Instead of conducting the study or providing recommendations, the (group) unilaterally proposed guidelines that were so extreme that they would prevent the marketing to children of foods that most parents consider a win if their kids eat -- such as yogurt, cheese sticks and even soup," said Upton at a joint hearing of two subcommittees.

Representative Marsha Blackburn, a Republican said the limits would "suppress free speech."

Representative Henry Waxman said the food industry spent $1.6 billion marketing to kids each year. The Democrat raised questions about assertions that the proposals would mean 700,000 lost jobs.

"It's a way not to have our kids subjected to advertising that they don't know what to do with. They're kids!" said Waxman. "Somebody should do something. If not government suggesting ideas, will industry act on its own?"

Food, beverage and restaurant companies, which are under scrutiny for contributing to rising childhood obesity rates, oppose the administration's attempts to limit ads to children.

About 17 percent of U.S. children aged 2-19 are obese, according to data on the CDC website. Nearly one in three U.S. children are overweight and rates are rising quickly.

The working group, which includes the Food and Drug Administration, Centers for Disease Control and Prevention, the Agriculture Department and the Federal Trade Commission, said in April that companies should end all food advertising to children unless they promote healthy fare, such as whole grains, fresh fruits or vegetables.

Under that proposal, salty, fatty or very sweet foods or foods with trans fats would no longer be advertised to children aged 17 or under.

But in testimony from the Agriculture Department, Dr. Robert Post backed a program from the industry's Children's Food and Beverage Advertising Initiative (CFBAI).

"Overall, the CFBAI standards present, in many respects, a reasonable set of criteria to consider for revising the... draft proposal," said Post.

The industry effort would ensure that at least half of all advertising to children would tout healthier foods.

Food companies also say they have cut the amount of sugar, far and calories in some products.

The FTC also weakened its recommendations.

David Vladeck, head of the FTC's Bureau of Consumer Protection, said the group would exempt older children from the guidelines and limit recommendations to children 11 and under.

It also excluded from the proposal advertising aimed at a general audience and advertising that was part of charitable or community events. It would not recommend banning clowns and cartoon characters, such as Ronald McDonald and SpongeBob SquarePants, used to advertise unhealthy foods.

Advertisers, who also are lobbying against the proposals, welcomed the changes, but said industry should be left to regulate itself.

The Obama administration, with its goal of containing healthcare costs, has emphasized children's health. First Lady Michelle Obama's "Let's Move" campaign has pushed children to eat healthier food and exercise more.

(Reporting by Diane Bartz in Washington and Lisa Baertlein in Los Angeles. Editing by Robert MacMillan)

(This story was corrected to delete reference in fourth paragraph to Waxman supporting an advertising ban; Waxman has not endorsed a ban)