Recently, Congressional leaders just said that they hoped to reach an agreement on a multibillion-dollar rescue plan to help the financial sector before the markets open Monday, even if House and Senate votes would come later.
According to Senate Majority Leader Harry Reid, D-Nev., said during an unusual weekend session of Congress, a final agreement result would be available by tomorrow. He said he hoped for an announcement by 6 p.m. EDT Sunday, just hours before the Asian markets open again.
President Bush seemed confidence that lawmakers soon would approve a bailout plan. He acknowledged that many Americans are dissatisfied, frustrated and angry that up to $700 billion in tax dollars may be needed to cover Wall Street companies' mistakes.
The rescue plan is intended to help bankers from toxic loans that threaten to derail the economy and plunge the country into a long depression. Lawmakers likened the situation to a major car wreck that has backed up traffic, credit, in this case, for miles. The bailout is meant to eliminate the wreckage so credit can start moving to borrowers again.
The main sticking point is with House Republicans. They object to several parts of the Bush administration's approach, developed largely by Treasury Secretary Henry Paulson. Negotiators sought to accommodate enough of their demands to entice a reasonable number of House Republicans to back the eventual plan, which is nearly certain to be unpopular with many voters.
Democrats and administration officials said they were willing to include House Republicans' idea of having the government insure distressed mortgage-backed securities. However, it is only as an option, not a replacement for the broader idea of buying outright those toxic securities.
Negotiators also discussed phasing in the program's costs. There is always a possibility after the first $350 billion is made available, then, Congress could try to block later amounts, which could total an additional $350 billion, if it believed the program was not working. The president presumably could veto such a move, however, requiring extra large margins in the House and Senate to override.
Some Democrats still want a provision allowing bankruptcy judges to rewrite mortgages to assist homeowners avoid foreclosure. The debate has divided Republicans more so than Democrats, with Bush struggling to salvage the main elements of his plan from attacks by members of his own party.
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