Tense negotiations continue over Wall Street bailout

Negotiations are continuing at Capitol Hill in Washington tonight on the Bush administration's $700 billion Wall Street bailout…

Negotiations are continuing at Capitol Hill in Washington tonight on the Bush administration's $700 billion Wall Street bailout.

At a news conference, Senate Majority Leader Harry Reid, a Nevada Democrat, said Republican and Democrats have agreed to  stay in the talks until a deal was done.

"We're going to get this done and stay in session as long as it takes to get it done,'' MR Reid told reporters in Washington.

He said Congress members who are negotiating the deal with Treasury Secretary Henry Paulson had three non-negotiable points. They include limits on executive pay for companies that participate in the bailout plan, protections for taxpayers and help for homeowners facing foreclosure.

He also complained that presidential election politics are hurting the negotiations,  criticising Republican Presidential candidate John McCain, who suspended his campaign until agreement is reached on a financial rescue package. "All he has done is stand in front of the cameras. We still don't know where he stands on the issue," Mr Reid said.

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Earlier today, President George W Bush said he was confident of securing a deal. In a brief statement from the White House, Mr Bush said the US is facing a huge financial problem and Congress needs to move quickly to address it.

He said that while there were disagreements on parts of the financial bailout plan, he expected legislation to be agreed. "We are going to get a package passed," Mr Bush said in a statement outside the Oval Office at the White House. "We will rise to the occasion, where Republicans and Democrats will come together and pass a substantial rescue plan."

In a chaotic turnaround last night that disrupted the choreography of an extraordinary White House meeting meant to show joint resolve from the president, the political parties and the presidential candidates, yesterday's summit broke up so bitterly that Treasury Secretary Henry Paulson got on one knee before Democratic leaders in a theatrical attempt to salvage talks.

The revolt centred on the cost of the proposed bailout and opposition to the control it would give the US government in the markets.

After six days of negotiations on the bailout, there was far more confusion than clarity. An apparent breakthrough announced by key Congressmen yesterday came to nothing.

And the late-afternoon White House gathering of Mr Bush, Mr McCain, Mr Obama and senior congressional leaders turned into what one person in the room described as "a full-throated discussion" which McCain's campaign described as "a contentious shouting match."

Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee, emerged from the White House meeting to say the announced agreement "is, obviously, no agreement."

Mr McCain's campaign issued a statement saying, "the plan that has been put forth by the administration does not enjoy the confidence of the American people as it will not protect the taxpayers and will sacrifice Main Street in favor of Wall Street." The White House, too, acknowledged there was no deal, only progress.

A group of House Republican senators circulated an alternative that would put much less focus on a government takeover of failing institutions' assets.