OLYMPIA — An agreement reached Sunday to overhaul the state’s program for injured workers clears away a major obstacle bogging down lawmakers in the special session.

Now, their attention turns to resolving other conflicts, such as the budget and future debt limits, in hopes of finishing the

extra session before time expires Wednesday.

“We are by no means done,” Gov. Chris Gregoire said Sunday, adding that she hopes the session can end by Wednesday.

Completion of what Gregoire termed the “largest reform” in the 100-year history of the workers compensation program resolves one of the most contentious fights among lawmakers in years.

She said it puts the system on financially stable footing, prevents a double digit rate increase on businesses and gives injured workers options for settling claims without fear of coercion from employers.

House and Senate leaders from both parties joined Gregoire to announce the deal and offered varying degrees of praise for the final product.

“It is a baby-step forward. We did not all get what we wanted,” said Senate Minority Leader Mike Hewitt, R-Walla Walla.

House Speaker Frank Chopp, D-Seattle, said, “On balance, I think this is a fair deal for all concerned.”

For weeks, the debate centered on whether injured workers should be given an option of accepting a lump sum buyout for their claim as opposed to receiving a disability pension for life.

A coalition of Republicans and moderate Democrats in the Senate wanted it but Chopp and a majority of the House Democratic caucus did not, leaving the two chambers in a stalemate.

In the end, lawmakers dropped the buyout idea in favor of a Gregoire proposal to give workers a chance to craft a settlement for resolving their claims. Initially, only workers aged 55 or older could exercise the option when it takes effect in January. By 2016, it would apply to workers age 50 and up.

Under the terms, any settlement must pay workers no less than 25 percent and no more than 150 percent of the average monthly salary of state workers. Today, that would mean a minimum of $982 and a maximum of $5,976. Medical benefits are excluded from any settlement.

Other key pieces include a one-year freeze on the cost of living increases in benefits, creation of a reserve fund, additional fraud prevention efforts and an audit of the workers compensation program.

Contents of the agreement are being written into a bill which is expected to be voted on today by the House. If passed, it will be sent to the Senate for possible action today too.

The Association of Washington Businesses lauded the agreement while the Washington State Labor Council panned it.

Reaction among lawmakers was mostly supportive though it’s clear House Democrats will be split on the bill.

Rep. Mike Sells, D-Everett, who as chairman of the House labor committee was a central figure in negotiations, remained undecided Sunday.

“I have some questions,” he said.

Rep. John McCoy, D-Tulalip, who opposed lump sum payouts, said his angst eased when he learned his proposal for the audit is part of the bill.

But Rep. Luis Moscoso, D-Mountlake Terrace, a former labor leader, said he’s not supporting it.

“I understand why they have to do it. It’s a political arrangement,” he said. “It’s unfortunate that it’s come down to this to get out of town.”

Moderate Democrats view the agreement as a victory. They had made clear their willingness to endure a second special session in order to accomplish significant changes in the program.

“I’m very pleased. The wishes of the moderates at least in the House were well met,” said Rep. Christopher Hurst, D-Enumclaw.

“You’re asking me if 26 days of special session were worth it to keep businesses from closing and workers from being laid off?” he said. “Certainly. We did the right thing.”

Jerry Cornfield: 360-352-8623;jcornfield@heraldnet.com.