Friday, September 26, 2008
WASHINGTON (AP) - The Bush administration and Congress anxiously revived negotiations on a $700 billion financial bailout on Friday, one day after the largest bank collapse in U.S. history provided a brutal reminder of the risks of failure.
"There is no disagreement that something substantial must be done," declared President Bush. He urged lawmakers to "rise to the occasion" — and quickly.
In one small sign of progress, House Republicans dispatched their second-ranking leader, Rep. Roy Blunt of Missouri, to join the talks after their objections to an emerging compromise had brought negotiations to a standstill the day before. They also demanded "serious consideration" for a plan of their own, involving less government intrusion and lower cost to the taxpayers than the $700 billion that Treasury Secretary Henry Paulson has been seeking.
The legislation the administration is promoting would allow the government to buy bad mortgages and other sour assets held by investors, most of them financial companies. That should make those companies more inclined to lend and lift a major weight off the national economy that is already sputtering. But a significant number of lawmakers, including many House conservatives, say they're against such heavy federal intervention.
Under their plan, pushed at a White House meeting Thursday by House Minority leader John Boehner, instead of the government buying the distressed securities, it would insure them.
Presidential politics weighed heavily and unpredictably on the election-season effort to stave off a full-blown economic crisis.
After announcing earlier in the week he would suspend his campaign and return to the capital until there was an agreement, Republican John McCain abruptly reversed course and departed for Friday night's debate with Democratic rival Barack Obama in Mississippi.
There were fresh signs of urgency at both the White House and the Capitol, one day after an unusually tempestuous White House meeting and the collapse of Washington Mutual, the largest failure in U.S. banking history. The Seattle-based institution had invested heavily in the now-moribund mortgage market.
Bush made his brief remarks in hopes of projecting calm for the financial markets. And the Dow Jones industrials were up slightly near the end of the trading day.
At the close, the Dow ended the day at 11,143.13, up 121.07 points.