Business | Markets

Bailout plan slips out of political web

US lawmakers say they're making progress and hope to reach an agreement soon on a $700 billion government bailout to rescue Wall Street bankers from the bad loans that threaten to derail the economy and send it into a deep and long depression.

  • AP
  • Published: 23:40 September 27, 2008
  • Gulf News

Washington: US lawmakers say they're making progress and hope to reach an agreement soon on a $700 billion government bailout to rescue Wall Street bankers from the bad loans that threaten to derail the economy and send it into a deep and long depression.

In a sign of movement, House Republicans dispatched their second-ranking leader, Roy Blunt, to join the talks after their objections to an emerging compromise had brought negotiations to a standstill.

Negotiators were pushing for a deal before Asian markets open on Monday.

"I'm convinced that by Sunday we will have an agreement that people can understand on this bill," said congressman Barney Frank, a key Democrat in eight days of up-and-down talks designed to stave off an economic disaster.

House Speaker Nancy Pelosi added that "progress is being made", although Friday came and went without senior lawmakers from both parties sitting down together.

Neither she nor Frank divulged details at a late-afternoon news conference in the Capitol, though there was word of a large Democratic concession.

Related Links

Pelosi told fellow Demo-crats during a closed-door meeting that the idea of letting judges rewrite mortgages to help bank-rupt homeowners avoid foreclosure won't be a part of the emergency legislation.

That provision would be a deal-breaker for Republicans whose votes are needed to pass the measure, she said, according to lawmakers at the meeting.

Democrats and Bush administration officials also said they were willing to include House Republicans' idea of having the government insure distressed mortgages - but only as an option, rather than a replacement for the administration's more sweeping approach.

The major party presidential contenders - Republican John McCain and Democrat Barack Obama - agreed during their debate Friday that Congress must act soon.

Meanwhile, new details emerged of a remarkably tumultuous White House meeting on Thursday. With the session breaking up in disarray, according to two participants, President George W. Bush issued an appeal, saying, "Can't we just all go out and say things are OK?"

The group around the table, congressional leaders as well as McCain and Obama, spurned the presidential request for a publicly united front.

Earlier in the White House meeting, Democrats peppered House Republican leader John Boehner with questions about the details of an alternative he was backing. "I don't know what the hell they are, Bush said at one point," recalled one person who was in the room. All the participants spoke on condition of anonymity, saying the meeting was private.

The legislation the White House is promoting would allow the government to buy bad mortgages and other sour assets held by investors, most of them financial companies.

That should make those companies more inclined to lend and lift a major weight off the already sputtering US economy.

But a significant number of lawmakers, including many House conservatives, say they're against such heavy federal intervention. Under the Republican plan, the government would insure the distressed securities rather than buy them.

More from Markets

  1. Single Gulf currency: Beyond political will

  2. Macro-economic woes dent outlook

  3. Saudi shares gain on US confidence, China growth

  4. Downtrend expected to reverse

All articles in Markets

More from Business

Gulf News
Popular in Markets
Popular in Business

More from Business

Business Editor's choice