Warned of a possible financial panic, key Republicans and Democrats reported agreement in principle Thursday on a $700 billion bailout of the financial industry and said they would present it to the Bush administration in hopes of a vote within days.
WASHINGTON —Warned of a possible financial panic, key Republicans and Democrats reported agreement in principle today on a $700 billion bailout of the financial industry and said they would present it to the Bush administration in hopes of a vote within days.
Emerging from a two-hour negotiating session, Sen. Chris Dodd, D-Conn., the Banking Committee chairman said, "We are very confident that we can act expeditiously."
"I now expect that we will indeed have a plan that can pass the House, pass the Senate (and) be signed by the president," said Sen. Bob Bennett, R-Utah.
The bipartisan consensus on the general direction of the legislation was reported just hours before President Bush was to host presidential contenders Barack Obama and John McCain and congressional leaders at the White House for discussions on how to clear obstacles to the unpopular rescue plan.
Tony Fratto, the White House deputy press secretary said the announcement was "a good sign that progress is being made."
"We'll want to hear from (Treasury) Secretary (Henry) Paulson, and take a look at the details. We look forward to a good discussion at the meeting this afternoon," he said.
On Wall Street, financial markets grew more upbeat as the Dow Jones industrial average at times rose more than 300 points.
Key lawmakers in Washington said at midday that few difficulties actually remained, although no details of their accord were immediately available.
"There really isn't much of a deadlock to break," said Rep. Barney Frank, D-Mass, chairman of the House Financial Services Committee.
But there were fresh signs of trouble in the House Republican Caucus. A group of GOP lawmakers circulated an alternative designed to attract private capital back into the credit markets with less government intrusion.
Under the proposal, the government would provide insurance to companies that agree to buy frozen assets, rather than purchase them directly as envisioned under the administration's plan. The firms would have to pay insurance premiums to the Treasury Department for the coverage.
"The taxpayers haven't done anything wrong," said Rep Eric Cantor, R-Va., adding that rather than require them to bear the cost of the bailout, the alternative "pretty much puts the burden on Wall Street over time."
Rep. John A. Boehner, R-Ohio, the minority leader, was huddling with McCain on the rescue. Earlier, asked whether the GOP presidential nominee could corral restive Republicans to support the plan, Boehner said, "Who knows?"
And Rep. Spencer Bachus of Alabama, the only House Republican in the bargaining meeting, did not directly say he agreed with the other lawmakers who emerged describing an imminent deal.
"There was progress today," said Bachus, the senior Republican on the Financial Services panel.
Bush told the nation in a televised address Wednesday night that passage of the package his administration has proposed is urgently needed to calm the markets and restore confidence in the reeling financial system. His top spokeswoman, Dana Perino, had told reporters earlier today that "significant progress" was being made.
House Speaker Nancy Pelosi, D-Calif., said Bush's agreement with Democrats on limiting pay for executives of bailed out financial institutions and giving taxpayers an equity stake in the companies cleared a significant hurdle.
The core of the plan envisions the government buying up sour assets of shaky financial firms in a bid to keep them from going under and to stave off a potentially severe recession.
It was not yet clear how lawmakers had resolved lingering differences over how to phase in the eye-popping cost — a measure demanded by Democrats and some Republicans who want stronger congressional control over the bailout — without spooking markets. A plan to let the government take an ownership stake in troubled companies as part of the rescue, rather than just buying bad debt, also was a topic of intense negotiation.
Bush acknowledged Wednesday night that the bailout would be a "tough vote" for lawmakers. But he said failing to approve it would risk dire consequences for the economy and most Americans.
"Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold," Bush said as he worked to resurrect the unpopular bailout package. "Our entire economy is in danger."
Obama and McCain called for a bipartisan effort to deal with the crisis, little more than five weeks before national elections in which the economy has emerged as the dominant theme.
Presidential politics intruded, nonetheless, when McCain on Wednesday asked Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown. Obama said the debate should go ahead.
On the Net:
White House: http:www.whitehouse.gov
House Financial Services Committee: http:financialservices.house.gov