"It was becoming very clear to us that this [administration-backed] bill was not going to pass in the House," said Rep. Paul Ryan, R-Wis. "There was not support among Republicans, and even many Democrats were not going to vote for this bill."
"So what did we do?" he asked. "We rolled up our sleeves, and we tried to come up with a plan that could pass the House. And what we learned was the big problem with this bill was the taxpayers were getting stuck with the tab."
Group members said they want to work with Democrats, describing their plan as the product of a working group put together by Boehner in an effort to find bipartisan support.
The group acknowledged briefing McCain on the plan, but Rep. Eric Cantor, R-Va., said that it was not a product of the McCain campaign and that the GOP presidential nominee had not endorsed it.
The plan is funded by insurance and it requires the government to provide insurance to holders of bad mortgages. Those assets would then have value, supposedly allowing commerce to restart and the markets to begin to work again.
"We understand that there is a problem on Wall Street that can infect Main Street, but Wall Street needs to pay for it," said Rep. Jeb Hensarling, R-Texas. "We hope in the hours and days to come that we have the ability to work with Democrats, that this will be considered."
Things looked much brighter for the main bailout plan earlier in the day.
As the meeting with Bush, congressional leaders and the presidential candidates got under way, staff members of the Senate Banking Committee released an "agreement of principles" to reporters at the White House.
Under the agreement, only $250 billion of the $700 billion would be initially funded and an additional $100 billion would be provided when the treasury secretary asked for it. The final $350 billion could be denied. To do so, Congress would need to make a "joint resolution of disapproval."
The plan would also reduce inappropriate executive compensation for companies that participate. Taxpayers would receive some sort of equity in those companies. And most profits would be directed to pay down the national debt.
The agreement also called for an oversight board that could issue cease and desist orders, regular reports to Congress, a new inspector general to monitor the treasury secretary and General Accounting Office audits of funds.
The plan would require the government to modify mortgages it owns or controls to prevent foreclosures and, where possible, coordinate efforts to modify loans it does not control. Also, a portion of future profits from the plan would be used to fund existing affordable housing programs.
McCain, Obama and top congressional negotiators then met with Bush at the White House to discuss the proposal.
"I want to thank the leaders of the House and the Senate for coming. I appreciate our presidential candidates for being here, as well," Bush said in remarks to the media as he sat beside the leaders before the meeting.
"We are in a serious economic crisis in the country if we don't pass a piece of legislation," Bush said. "I want to thank the spirit of bipartisan cooperation that's taking place here in Washington."