WASHINGTON: US lawmakers pushed to finalize a deal to create a $700 billion government fund to buy bad debt and halt the financial crisis, but the Senate is unlikely to vote on it before Wednesday, sources said.
With global markets hanging on every twist and turn in Washington, European regulators yesterday scrambled to prevent two banks from collapsing.
Congressional leaders from both parties said they had a tentative agreement, but questions abound as to whether the US financial rescue plan, which would use taxpayer funds to buy up toxic mortgage debt, would restore confidence to shaky markets and head off a deeper downturn.
The House of Representatives will vote on the bill today, said House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat. But the Senate faces more complex problems in passing legislation and sources close to the discussions said a vote would not come before Wednesday.
Congressional Republicans, balking at such a vast outlay of public money, sounded cautious on the deal, leaving markets to open the week with lingering uncertainty over the final form of a bailout that ranks as the largest in US history.
In a sign of the spreading financial crisis, Belgian-Dutch financial group Fortis faced a takeover or break-up as European Central Bank President Jean-Claude Trichet joined emergency talks with Dutch and Belgian lawmakers.
In London, regulators were preparing to nationalize troubled mortgage lender Bradford & Bingley.
Congressional leaders from both parties emerged early yesterday in Washington with a tentative agreement that altered key parts of a Wall Street bailout program initially proposed by the Bush administration.
But rank-and-file lawmakers had not seen the final version of the financial rescue plan and US House of Representatives Republicans cautioned that they would not sign off on the plan until they were certain it would shift some costs to a new form of bad debt insurance funded by Wall Street.
Both US presidential candidates offered qualified support for the bailout proposal, an issue that threatens to overshadow their campaigns with less than six weeks until the election.
“This is something that all of us will swallow hard and go forward with,” Republican John McCain said in an interview with the ABC television network. “The option of doing nothing is simply not an acceptable option.”
Democrat Barack Obama said he was likely to back the package. “My inclination is to support it,” he told CBS television’s “Face the Nation.” “We have to remember how we got here. Not so much to allocate blame, but to understand the choices that will face the next president,” he added.
