Congress will try again to pass an S-CHIP bill that can make it past the President, one way or another.
Senate and House negotiators said Sunday that they had agreed on a framework for a compromise bill that would provide health insurance to 4 million children while relaxing some of the limits on eligibility imposed by the Bush administration.
The compromise, which resembles a bill passed by the Senate with bipartisan support, sets the stage for a battle with President Bush, who has denounced similar legislation as a step "down the path to government-run health care for every American."
Tony Fratto, a White House spokesman, said, "The House and the Senate still appear to be far away from legislation that we would find acceptable."
Republicans will come under political pressure to support the compromise. But if the president vetoes it, he will probably have enough votes in the House to sustain his veto.
At issue is the future of the State Children's Health Insurance Program. Supporters of the Senate bill, passed last month by a vote of 68 to 31, had enough votes to overcome a presidential veto. Only five Republicans voted for the House bill when it was approved, 225 to 204.
The compromise is likely to pick up some Republican votes in the House but probably not enough to override a presidential veto, Republicans said.
The compromise would allow states to cover nearly half of the children who are uninsured. About 6.6 million youngsters are now covered.
Congressional action comes in response to urgent appeals from governors of both parties. In a letter to Congress last week, Gov. Sonny Perdue of Georgia, chairman of the Republican Governors Association, and Gov. Kathleen Sebelius of Kansas, chairwoman of the Democratic Governors Association, said, "For health and moral reasons, Congress must pass and the president must sign a reauthorization of the program by Sept. 30."