President Bush joined key supporters of a Wall Street bailout package today, prodding lawmakers to approve the plan, hours ahead of a difficult House vote expected later in the day. The Senate could take it up later this week.
By all accounts it was a tough weekend for lawmakers who crafted the legislation.
Late Sunday afternoon, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid held a news conference with Senate Banking Committee chairman Chris Dodd to announce that Congress would vote quickly on the legislation.
Earlier the Democratic Chairman of the House Financial Services Committee, Barney Frank, said the House would "definitely" begin debate Monday on the rescue package. A House vote could follow the same day, with the Senate possibly voting by mid-week.
"Inaction would paralyze our economy," Reid said. Dodd, who has been heavily involved in the rescue negotiations, praised Republican leaders, saying that "this was a collaborative effort."
Democrats agreed to the deal after accepting compromises demanded by some conservative Republicans and moderate Democrats.
"This agreement, while not perfect, will help stabilize the economy," Reid, D.-Nev., said in the news conference Sunday.
Late Sunday, even the House Republicans, who had balked at earlier proposals, seemed to indicate they were coming around. Democrats also hope that, after the compromises, enough House Republicans will vote for the package to give Democrats political cover.
"I'm encouraging every member of our conference -- if their conscience will allow them to -- to support this bill," said House Minority Leader John Boehner, R-Ohio.
The Bush administration has pushed for quick passage of the relief bill. Administration officials and congressional leaders hope the deal will boost investor confidence and lead to a sharp uptick in the financial markets Monday.
"This bill provides the necessary tools and funding to help protect our economy against a system-wide breakdown," Bush said in a statement. "Many Members of Congress contributed important ideas to improve the legislation my administration proposed. I appreciate the negotiators considering those ideas and incorporating them in this agreement."
Besides purchasing troubled assets such as mortgages, the current agreement would require the government to offer insurance -- at a cost to the Wall Street companies -- on some home loans instead of buying them. In effect, the government would guarantee some bad debts without having to fork over taxpayer money immediately.
Treasury officials would not speculate as to what would happen if no company wanted to participate, though they did acknowledge some institutions may ask to have Treasury buy their assets, others may opt for insurance and some may do both.
The legislation currently on the table states that after five years, the president -- whoever he or she may be -- will be required to submit to Congress a proposal to recover from the financial industry any losses taxpayers may have sustained in the bailout.
Congress acknowledged that recovering losses from hard-pressed companies could prove difficult.
The bulk of the bailout remains the government putting up staggering, unprecedented amounts of money to buy bad debts, many of them mortgages.