The Environmental Protection Agency turned 20 this year in style. With President Bush and Congress dueling for attention to elevate it to Cabinet status, the agency seemed ready to ride the crest of Earth Day into the top council of government.

But as this session of Congress winds down, the EPA may be denied its birthday wish for reasons that have little to do with the need for a Department of the Environment.

"I regret that the issue has gotten encumbered by very divisive issues that really are not related to Cabinet status," EPA Administrator William K. Reilly said yesterday. "It would be very disappointing if political haggling thwarted the elevation."

Curiously, the most divisive issue centers on the regulatory role of states, not the EPA, specifically whether state attorneys general should have the power to force cleanups of federal weapons plants within their borders. Key House members tacked the provision onto their EPA bill and demand it as a condition for the Cabinet promotion. Key Senate members, with equal intensity, oppose the new state powers.

Few discordant voices were heard last January when Bush endorsed the idea of moving EPA into the Cabinet. Reversing an earlier reluctance to engage in bureaucratic tinkering, the president said that environmental challenges had become "so important that they must be addressed from the highest level of government."

The initiative seemed to have more symbolic than practical value, a cost-free way for Bush to embrace environmentalism at a time of keen public interest in the issue. Reilly already attends Cabinet meetings and goes to international environmental conferences as the top U.S. environmental official. Legislation would change his title to secretary of the environment, but it offered no increases in the agency's $5 billion-a-year budget or 15,000 employees.

Nevertheless, the public relations value was too good for the Democratic-led Congress to pass up. The House, led by Rep. John Conyers Jr. (D-Mich.), passed a bill March 28 by a vote of 371 to 55, while Sen. John Glenn (D-Ohio) worked with administration officials to get a bill through his Governmental Affairs Committee April 2.

The House did not stop at the simple task of turning the agency into a department. It called for several controversial provisions that incurred White House threats of veto, including the creation of a Bureau of Environmental Statistics, whose director could not be fired by the president and whose reports would not be required, as EPA's are, to be reviewed by the Office of Management and Budget.

Also in the House bill is a provision, sponsored by Rep. Dennis E. Eckart (D-Ohio) and Rep. John D. Dingell (D-Mich.), giving state attorneys general the power to get around the concept of sovereign immunity, which shields the federal government from lawsuits to clean up dozens of weapons facilities polluted by hazardous waste.

In the Senate, the Glenn bill sparked controversy among three other committees that claimed joint jurisdiction, burying the issue in negotiations for months. Last week, a compromise emerged that is certain to ruffle feathers in the House.

The compromise would limit the proposed statistical bureau to the role of compiling information, so as not to intrude on the original data-gathering function of other agencies in the government, such as the National Oceanic and Atmospheric Administration of the Commerce Department. In an effort to appease the administration, the senators recommended that the director serve at the president's pleasure.

But because of strong opposition to the federal facilities provision, they ignored the issue so important to the House.

Instead, Senate Majority Leader George J. Mitchell (D-Maine) decided to handle it as a separate piece of legislation and won approval from the Senate Environment and Public Works Committee last week for a measure identical to the House's.

That seemed to clear the way for passage of two Senate measures not far from the House bill. But prospects for passage dimmed last week when the chairman and ranking minority member of the Energy and Natural Resources Committee, which shares jurisdiction over the EPA bill, said they would not allow it to the floor if Mitchell's provision was offered as an amendment. And Mitchell faces strong opposition to the legislation as a free-standing measure.

In the House, meanwhile, Eckart and Dingell, the chairman of the House Energy and Commerce Committee, have insisted on the federal facilities provision as a price for passing the legislation.

Yesterday, Conyers met with Glenn to discuss the two key points of controversy. He emerged "very much concerned," he said, but still optimistic about a bill.

Administration officials were less sanguine. "It's difficult to see our way out of this box now," said one official.