WASHINGTON—President Bush and Congress are clashing over how to address the housing crisis, clouding the prospects of an election-year rescue package.

Bush said Wednesday he would veto Democrats’ broad housing aid plan, saying it wouldn’t help struggling homeowners.

“We are committed to a good housing bill that will help folks stay in their house, as opposed to a housing bill that will reward speculators and lenders,” Bush said at the White House after meeting with House Republican leaders.

The measure, aimed at preventing foreclosures, would have the government step in to insure up to $300 billion in new mortgages for distressed homeowners. A House vote is expected by Thursday.

The bill by Rep. Barney Frank, D-Mass., would relax standards at the Federal Housing Administration so it could back more affordable, fixed-rate loans for borrowers currently too financially strapped to qualify.

Those homeowners could refinance into new loans if their lenders agreed to take substantial losses on the original mortgages. Borrowers would have to show they could afford to make payments on the new loans. They would have to share with FHA at least half of their proceeds if they profited from selling or refinancing again.

Despite growing GOP support for the plan, especially among Republicans from areas hardest hit by the housing crisis, it could fall victim to an election-year fight over which party is doing more to help homeowners in need.

The White House calls the plan a burdensome bailout that would open taxpayers to too much risk.

The White House has also threatened that Bush would veto a separate bill to send $15 billion to states to buy and fix up foreclosed properties. Officials say that measure rewards lenders and investors who own the property, and could act as an incentive for them to foreclose rather than find ways to help struggling borrowers stay in their homes.

The opposition comes despite Democrats’ attempts to attract Republican support for their housing package by including a grab-bag of measures Bush has called for.