Government crafting a financial rescue plan

— -- Treasury Secretary Henry Paulson on Friday sketched the outlines of a bold approach to confront the nation's financial crisis. "We're talking hundreds of billions" of dollars, he said.

Paulson said he would work through the weekend with congressional leaders to reach agreement on a plan that would address the root problems of the financial crisis gripping the country.

He, lawmakers and other top government officials already met Thursday night on Capitol Hill and pledged to act quickly to find a solution to the financial sector's woes.

Paulson and Federal Reserve Chairman Ben Bernanke met with Republican and Democratic lawmakers to discuss market conditions and address ways to stem the crisis. In a statement, they said they would search through the weekend for a solution.

"This needs to be big enough to make a real difference and get to the heart of the problem," Paulson told reporters at the Treasury Department on Friday.

Wall Street, desperate for a way out of a deepening financial crisis that has wiped out $3 trillion in stock value this year, appears to be betting that the government will ride to the rescue with a major new bailout plan.

Stocks surged Friday and held on to their gains after Paulson's press conference.

Paulson said that the new troubled-asset relief program that he wants Congress to enact must be large enough to have the necessary effect while protecting taxpayers as much as possible.

Related Stories

What witnesses said about Trump, classified docs

• Apr 24, 4:58 PM

SCOTUS hears Trump claim of 'absolute immunity'

• Apr 25, 10:02 AM

OJ Simpson dies at 76

• Apr 11, 6:32 PM

"I am convinced that this bold approach will cost American families far less than the alternative — a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion," Paulson said.

"The financial security of all Americans ... depends on our ability to restore our financial institutions to a sound footing," Paulson said.

Among the steps outlined:

• Mortgage giants Fannie Mae and Freddie Mac will step up their purchases of mortgage-backed securities to help provide support to the crippled housing market.