Bailout push hits fever pitch; executive pay deal reached

WASHINGTON -- Treasury Secretary Henry Paulson agreed to congressional demands Wednesday to limit the pay of executives whose firms benefit from any financial market bailout, even as Democrats and Republicans pressed for additional concessions and the White House mounted an all-out lobbying press to secure a deal.

Several lawmakers said they were hoping to vote on a version of the Treasury Department's $700 billion plan by Sunday at the latest, concerned about a negative market reaction if they didn't reach agreement by the start of business next week.

Democratic leaders noted growing consensus in areas including tougher oversight and ensuring that taxpayers benefit from any plan through strategies such as federal ownership of corporate stock. But Sen. Richard Durbin, D-Ill., said the White House continued to push back against congressional efforts to shrink the size of the program or release the money more slowly, as well as his proposal to let judges write off mortgage debt in bankruptcy cases. Republicans also proposed modifications.

While many Democrats want to break the $700 billion into installments or take other steps to reduce the size of the massive plan, Durbin and others said Paulson and Federal Reserve Chairman Ben Bernanke have resisted the efforts in an meetings with lawmakers.

"There's a shock and awe aspect to this, a feeling it has to be a significant size" to have a market impact, Durbin said.

Under the plan, the Treasury Department would buy troubled mortgage loans and other debt securities now held by financial companies. The department could later re-sell them. The proposal is designed to set a floor under asset prices, including house prices; restore market confidence; free up bank capital; and ensure that credit remains available to businesses and consumers.

Many in Congress pleaded for more time to study the bill, look at possible alternatives and explain the economic stakes to outraged voters. Lawmakers say they've been flooded with e-mails and phone calls opposing what they call a taxpayer-funded Wall Street bailout. The White House, which delivered the plan Saturday to Capitol Hill as a bare-bones, three-page document, has been pushing for a vote by the end of the week.

"This notion that we would approve this bailout — $700 billion — today or tomorrow is irresponsible," says Rep. Lloyd Doggett, D-Texas. "We need to move expeditiously, but we need to look carefully at this question of why we would shift all the cost to the people that weren't at the party."