US heads for deal on $700b financial bailout

Washington: The leader of the House of Representatives, Speaker Nancy Pelosi, voiced hope on Thursday that a White House accommodation with congressional leaders on protections for US taxpayers will help speed agreement on a bill to stabilise distressed financial markets.

Pelosi spoke to reporters as Democratic and Republican negotiators worked in a closed-door meeting in Congress to nail down the outline of an agreement by the end of the day. The pace of developments was quickening in advance of a highly-anticipated meeting that President George W. Bush will hold with leading lawmakers and presidential nominees John McCain and Barack Obama.

Doubts

Bush told the US in a televised address on Wednesday that passage of the $700 billion bailout package his administration has proposed is urgently needed to calm the markets and restore confidence in the reeling financial system. And his top spokeswoman, Dana Perino, said yesterday she thought "significant progress" was being made. Financial markets were mixed in early trading; the Dow Jones industrial average rose more than 200 points on optimism about the deal but a credit market squeeze remained as doubts about the proposed plan's effectiveness drove demand for short-term, safe-haven assets.

Pelosi, a Democrat, said that Bush's agreement with Democrats on limiting pay for executives of bailed out financial institutions and giving taxpayers an equity stake in the companies is evidence of progress.

She also said that McCain, a Republican, had called her and that she had told him that talks were headed in the right direction.