Congress likely to vote on bailout plan today

Washington: US lawmakers announced a landmark $700 billion bailout deal to rescue the embattled US economy.

The announcement of the deal, which is backed by both Democratic and Republican leaders, came after days of talks between key politicians.

The biggest US bailout in history won the tentative support of both presidential candidates and goes to the House for a vote on Monday.

House of Representatives Speaker Nancy Pelosi, a Democrat, said the plan was not a "bailout of Wall Street" but a way to protect taxpayers and turn around the economy.

US Treasury Secretary Henry Paulson said he was confident the programme will be enough to free up jammed financial markets and keep credit flowing.

US President George W. Bush called the vote a difficult one for lawmakers but said he is confident Congress will pass it.

"Without this rescue plan, the costs to the American economy could be disastrous," Bush said in a written statement released by the White House. He was to speak publicly about the plan early Monday morning, before U.S. markets open.

Key lawmakers who deal on a $700 billion (Dh2.56 trillion) bailout for the financial industry predicted on Sunday it would pass Congress, putting in place the largest government intervention in markets since the Great Depression of the 1930s.

Officials in both parties were hopeful for a House vote on Monday, and the two presidential candidates said they probably would support it.

Starving for cash

Under the rescue plan, the government would pump as much as $700 billion into beleaguered financial firms that are starving for cash, taking over huge amounts of devalued assets from the companies in the hopes of unlocking frozen credit.

The proposal is designed to end a vicious downward spiral that has battered all levels of the economy, in which hundreds of billions of dollars in investments based on mortgages gone bad have cramped banks' willingness to lend.