CSS - apply padding to inline element across two lines

Question

I have to create a style to apply a background color and padding to a header element, resulting the following intended appearance (Photoshop mock-up):

My CSS

Answer 1

EDIT: nvm, didn't notice the white line; wouldn't giving & nbsp ; instead of regular spaces help?

give it an inline-block display, be sure to make it display:inline for ie7

regular

h1 { display:inline-block }

ie7 only

h1 { display:inline}