Majority Democrats are hoping for quick approval of an agreement reached with the Bush administration to bailout endangered financial institutions. Lawmakers from both major U.S. political parties met late Sunday to examine details of the legislation being drawn up in advance of House and Senate consideration this week. But as VOA's Dan Robinson reports, success could depend on support from enough Republicans in the House of Representatives which is not assured.
House of Representatives Speaker Nancy Pelosi says the legislation will come up for a vote in the House on Monday. Under the plan, the government would provide $700 billion to purchase de-valued mortgage-backed securities and other assets from troubled financial firms.
However, Congress would provide the funding in stages: $250 billion immediately, $100 billion upon approval by President Bush, and $350 billion when lawmakers give their final approval.
In addition, an oversight board, to include the Chairman of the Federal Reserve, the nation's central bank, would maintain accountability and report to Congress. Steps would also be taken to prevent more Americans from losing their homes, and enable taxpayers to obtain equity stakes in financial firms.
The plan would set limits on the pay for executives of firms involved in the bailout, a critical point for lawmakers facing a wave of complaints from constituents over multi-million dollar corporate salaries.
As lawmakers met to examine these and other details in the proposed legislation on Sunday, House Speaker Pelosi addressed reporters:
"The party is over," said Nancy Pelosi. "The era of golden parachutes for high-flying Wall Street operators is over. No longer will the U.S. taxpayer bailout the recklessness of Wall Street. And that is the news this legislation brings."
Other components include a mechanism for the government to tax companies benefiting from the bailout if losses are still being felt after five years, an additional effort to recover losses.
Amid indications that most Senate Republicans would support the legislation, Republican Senator Judd Gregg said the hope is that U.S. credit markets will react positively to the news.
"We have given the [Treasury] Secretary the authority and the resources and flexibility necessary, that he feels are necessary," said Judd Gregg. "Of course, he is the one who has to make the call, to hopefully be able to go forward and stabilize the credit markets, and free up the credit markets."
Crucial to congressional approval will be support from House Republicans, who protested strongly against the initial administration proposal and insisted on significant additions.
Saying the responsibility of Congress is to prevent a bad situation from getting worse, Senate Majority Leader Harry Reid said inaction now would paralyze the U.S. economy.
"The Speaker [of the House of Representatives] is going to send this [to the House] tomorrow, this legislation, we hope it passes here [in the Senate]," said Harry Reid. "We will have to see what kind of support we get from the Republican House members. When we get it on our side, we will try to move it."
Republicans complained about the size of the bailout, with some asserting that Democrats tried to cut them out of the negotiation process.
After intense debate in a three-hour meeting of the House Republican caucus, Minority Leader John Boehner said the amount of taxpayer risk in the plan has been reduced. He said he and other party leaders made clear that they would support the plan, but that they could not say how many Republicans would end up voting for it.
"I am encouraging every member of our conference whose conscience will allow them to support this bill," said John Boehner.
Appearing with congressional leaders early Sunday, Treasury Secretary Henry Paulson expressed hope the plan will help stabilize markets.
"We begin with a very important task - a task to stabilize the markets, to protect all Americans and do it in a way which protects the taxpayer to the maximum extent possible," said Henry Paulson.
House Financial Services Committee Chairman Barney Frank responded to a criticism heard from many Americans, that the deal will help Wall Street rather than Main Street, saying that Congress will take further actions next year.
"Remember, that the people on Wall Street who have gotten wealthy during this period will live very well no matter what happens over the next couple of months," said Barney Frank. "If lending dries up, if people have trouble reinfinancing homes, if there are not car loans, an Senator Reid mentioned, if small businesses cannot finance their inventory, the people on Wall Street aren't going to be hurting, the people who will be hurting are the average Americans."
In a written statement on Sunday, President Bush called the votes lawmakers face "difficult," but said inaction would be disastrous for the U.S. economy and risk what he called a "system-wide breakdown." The president is expected to make a televised statement early Monday before U.S. financial markets open.
Both major U.S. presidential candidates - Republican John McCain and Democrat Barack Obama - expressed tentative support on Sunday for the rescue plan, the biggest financial bailout in U.S. history.