This Bailout Is Like You Bailing Out The Burglar That Robbed Your House

OXFORD, Miss. - With the presidential campaign in limbo and Wall Street on tenterhooks, efforts by U.S. lawmakers to craft a $700-billion financial rescue plan stalled Thursday amid growing opposition to the bailout among conservative Republicans.

The setback sparked a wave of partisan finger-pointing among frustrated members of Congress, just hours after Senate leaders from both parties announced they had reached broad agreement on the principles of a bailout.

"I can tell you, I don't believe we have an agreement," said Alabama Senator Richard Shelby, the ranking Republican on the Senate banking committee. "There's still a lot of different opinions. Mine is, it's flawed from the beginning."


U.S. President George W. Bush discusses the economic crisis during a meeting with members of congress, including John McCain, left.

The remarks came after an unprecedented White House meeting that included President George W. Bush, Republican presidential candidate John McCain, Democratic candidate Barack Obama and leaders of Congress from both parties.

The meeting ended with Democrats complaining it had been a waste of time and seemed aimed more at bolstering McCain - who had urged Bush to convene the gathering - than making progress on a deal.

"I'm sorry we lost two or three hours on what was just a show down at the White House," said Democratic Senator Chris Dodd of Connecticut, chairman of the Senate banking committee. "I can't quite understand what was going on down there except political theatre.

"I didn't need to be in the White House basically to have a photo opportunity for John McCain."

McCain, who announced Wednesday he would suspend his campaign to join negotiations, balked at the Democratic criticism.

"I've got to do what I think is right for the country . . . and if that hurts me politically, I'll gladly take the hit," he said.

Democratic leaders in Congress announced negotiations would resume late Thursday. Speaking to reporters after the White House meeting, Obama said he would stay in Washington overnight, but urged McCain to join him Friday night in Oxford, Miss., for their first scheduled presidential debate.

McCain has said he would not attend the debate unless a deal on the financial crisis was reached.

"What I have found, and I think it was confirmed today, is that when you inject presidential politics into delicate negotiations, it is not necessarily as helpful as it needs to be," Obama said. "There's the potential for posturing and suspicions."

McCain told NBC News he remained "very hopeful" a deal could be reached and that he would then attend the debate.

At times Thursday, the whirlwind turn of events seemed equal parts politics and statesmanship.

Early in the afternoon, negotiators from the Senate and House of Representatives emerged from negotiations to say they had struck a deal to authorize the federal government to buy bad mortgage assets that have plunged Wall Street into financial crisis, and which Bush said could trigger a long and painful recession.

The proposed plan would place caps on pay packages for corporate executives receiving help and would see the government take an ownership stake in some firms so U.S. taxpayers could benefit if the companies again become profitable.

The plan would have made $250 billion immediately available to the U.S. Treasury, with further authorizations subject to further scrutiny by Congress.

"I now expect we will indeed have a plan that can pass the House, pass the Senate, be signed by the president, and bring a sense of certainty to this crisis that is still roiling in the markets," Senator Robert Bennett, a Utah Republican.

Within hours, conservative Republicans in the House of Representatives said they would not go along with the plan, jeopardizing chances it would be approved.

McCain, too, withheld his own endorsement of the agreement, saying lawmakers continued to have "legitimate concerns" about the bailout.

Obama said he thought "things were moving forward."

"There was some rough consensus around those principles," Obama said. "My impression from the meeting today was that the president and the Secretary of the Treasury still have some work to do with the House Republicans."

Rep. Eric Cantor, a Republican leader in the House, said he had "not seen a way to getting majority support" among GOP lawmakers for the plan.

At the White House, Bush again implored lawmakers to reach a deal.

"We're in a serious economic crisis in the country if we don't pass a piece of legislation," Bush said.

But it was unclear what had actually been accomplished at the White House.

"It was not a negotiating session," said Democratic Rep. Steny Hoyer, the House Democratic leader.

Members of Congress from both parties have reported voters are furious with the idea of helping Wall Street at a time when homeowners are defaulting on their mortgages and ordinary taxpayers are seeing the retirement savings nosedive.

The negotiations come at a tricky time, not just for the presidential candidates, but for lawmakers facing re-election in November.

Republicans, in particular, say they cannot justify the deal to constituents and oppose the bailout on principle, calling it unwarranted government intervention in the market.