WASHINGTON – When President Bush proposed a $6 billion program to spur development of new vaccines and treatments to counter bioterrorism, he was widely applauded by lawmakers, the drug industry and terrorism experts.

But now, four months later, Congress is wrestling with the details of "Project BioShield." Some lawmakers are balking at the open-ended funding commitment sought by the Bush administration, while drugmakers are lobbying for liability protections and trying to make other parts of the proposal more to their liking.

No one is suggesting that the program is in jeopardy. But the maneuvering on Capitol Hill illustrates the complexity and difficulty of devising a dramatic expansion of the federal government's role in key areas of drug development and homeland security.

"Project BioShield is not business as usual," said Vijay Samant, president and chief executive officer of Vical, a San Diego-based vaccine developer.

The program could be a boon to biotechnology companies like Vical. The company makes experimental DNA vaccines for diseases including anthrax and Ebola, a virus that causes deadly hemorrhaging.

BioShield is meant to encourage the development of new drugs to combat such biological threats, as well as chemical and radiological terrorism, by creating a guaranteed funding source and buyer – the U.S. government – for cutting-edge products that may have little commercial value. Vaccines and treatments for smallpox, anthrax, plague, Ebola and botulism are among the priorities.

"These companies clearly need some assurances that there will ultimately be a return for their investment. Without such assurances, they will simply pursue the development of other products," said Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.

The program also promises to speed government grants and contracts for research and development of new therapies and to expedite peer review procedures. Some unapproved drugs could be used on an emergency basis in the event of an attack, if alternative treatments were not available.

A centerpiece of BioShield is the Bush administration's desire for "permanent indefinite funding authority," which would insulate the program from the political vagaries of annual congressional budget making.

Fauci has repeatedly told lawmakers that many vaccine developers "do not want to be vulnerable to the (uncertainty) of the cyclical appropriations process."

Joe Panetta, president and CEO of Biocom, a San Diego-based trade association for biotech companies, called the federal funding commitment crucial.

"Too often what the companies have been up against under the traditional process is they'll get funding for a short period of time and, as their product moves through the development process, there will no longer be funding there," he said.

But many in Congress are reluctant to surrender their hold on the federal purse and the ability it gives them to keep a check on programs. While the Senate Health Committee approved legislation in March authorizing "such sums as may be necessary" for BioShield, Sen. Robert Byrd, D-W.Va., objected to the open-ended funding and has blocked a vote by the full Senate.

Last week, the House Energy and Commerce Committee agreed to $5.6 billion for the program over 10 years, about what the president wanted, but balked at making the spending mandatory. The committee also limited the total amount that could be spent through fiscal year 2008 to $3.4 billion, starting with $890 million in 2004.

"I find mandatory appropriations eliminate responsibility, oversight and the opportunity to see to it that the legislation works," said Rep. John Dingell, D-Mich. "Clearly, people in the administration have the idea... that they should be able to function above law and without supervision."

The administration had a low-key response, but did not endorse the committee's approach.

"The amount of money is about the same. So hopefully the differences can be worked out," Fauci said in an interview.

Another thorny issue confronting lawmakers and the Bush administration is the drug industry's desire for liability protection in case a vaccine or treatment proves harmful, especially if it is used on an emergency basis before Food and Drug Administration approval.

"We obviously would prefer to have some liability protection in there" beyond the usual federal contracting guidelines the legislation contains, said Eric Loumeau, vice president and counsel for Hollis-Eden Pharmaceuticals of San Diego.

House Energy and Commerce Committee Chairman Billy Tauzin, R-La., said it "was my preference to add such provisions," but he feared it would require difficult negotiations that would halt progress on the bill.

Rep. Henry Waxman, D-Calif., has suggested that patients also deserve some protection.

"I understand why we'd want to give liability protection to the manufacturers of these products," he said during a House Government Reform Committee hearing on the BioShield. "But on the other hand, if we're going to indemnify the companies... some of these products still may harm consumers. If the administration can guarantee liability protection to manufacturers, should it also compensate those who are injured by the products?"

Some observers believe the matter eventually will be settled behind closed doors, when House and Senate negotiators meet to resolve differences over their legislation.

"They may not want to deal with this issue publicly. It's touchy," said one industry lobbyist.

Pharmaceutical companies also have some concerns about a requirement that drugs be produced and delivered within five years. The Senate legislation allows a contract to be terminated within three years "for failure to deliver a reasonable number... of units of the product," with no compensation for the manufacturer.

"Some technologies, five years you're pushing it," said Samant, the Vical executive, noting that drugs can take more than a decade to develop.

But Fauci said a contract for a vaccine or treatment would in most cases start toward the end of a drug's development cycle.