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US Lawmakers Working on Financial Bailout

U.S. lawmakers are continuing talks on a massive rescue plan for America's struggle financial services industry. VOA White House Correspondent Scott Stearns reports, U.S. President George Bush is facing opposition from members of his own party who object to the cost of the plan.

President Bush says the entire U.S. economy is endangered by uncertainty over billions of dollars worth of mortgage-backed securities that have lost value and threatened the U.S. economy.

Banks holding these assets are restricting credit, making it harder for businesses and consumers to get loans. So President Bush wants Congress to spend as much as $700 billion to buy up these bad loans and securities, giving more banks more money to lend.

In his weekly radio address, the president says he knows many Americans are frustrated with the situation and feel it is unfair to pay for mistakes by Wall Street investors when many taxpayers are struggling to meet mortgage payments.

Mr. Bush says the cost of letting so many banks fail will ultimately be far higher for consumers than the financial rescue package he is trying to get through Congress.

"The failure of the financial system would cause banks to stop lending money to one another and to businesses and consumers," he said. "That would make it harder for you to take out a loan or borrow money to expand a business. The result would be less economic growth and more American jobs lost. And that would put our economy on the path toward a deep and painful recession."

Public opinion polls show as many as 40 percent of Americans oppose the government plan to spend taxpayer money to buy up bad investments.

Most Democrats and Republicans in the Senate agree to the broad principles of the president's bailout, but Republicans in the House of Representatives object to the cost. They want an expanded insurance system to cover failing mortgage-backed securities.

In the Democratic radio address, House Majority Leader Steny Hoyer says "The money spent must be accounted for".

"This Congress does not write $700 billion blank checks" he said. "There will be strong oversight of where and how that money is spent. Taxpayer money can not fund lavish bonuses or golden parachutes for CEO's whose irresponsibility helped bring on this meltdown."

Though not included in his original plan, President Bush has agreed to limits on executive compensation and a bipartisan board to oversee the purchase of failing securities.

Lawmakers continued to work on the plan Saturday. Two top Democrats, Senate Majority Leader Harry Reid and the Chairman of the House Financial Services Committee Barney Frank, say they believe a deal can be in place by Sunday. Lawmakers hope to announce an agreement before Asian markets open Monday.