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Congress resumes bail-out talks Congress resumes bail-out talks
(20 minutes later)
US lawmakers have reconvened to try to seal a $700bn Wall Street rescue deal aimed at stabilising financial markets. US lawmakers have reconvened to try to seal a $700bn (£380m) rescue deal to end the financial crisis.
The Senate Majority leader Harry Reid told the US Senate "significant progress" had been made, but stressed there was still "a long way to go". The Senate Majority leader Harry Reid told the upper house "significant progress" had been made, but stressed there was still "a long way" to go.
He said about 15 issues remained unresolved, but hoped the outline of a deal could be agreed by Sunday night.
Negotiators are keen to reach an agreement before the markets reopen around the world on Monday.Negotiators are keen to reach an agreement before the markets reopen around the world on Monday.
Optimism about the deal's chances also grew after both presidential candidates agreed on the need for urgent action. During a rare Saturday session of the Senate, Mr Reid said congressional staff had worked on the legislation for the bail-out plan until the early hours of the morning.
Meanwhile President George W Bush used his weekly radio address to try and reassure those Americans concerned about the burden on taxpayers of the deal, by saying the package would end up costing less than $700bn.
Compromises
Optimism about the chances of a deal grew after Democrats made a key concession on Friday.
We hope sometime [Sunday] evening we can announce there has been some kind of agreement in principle so that the only thing that will have to be done is the legislation> Democrat Senator Harry Reid Rescue deal stalemateBail-out: the sticking pointsMore cash injected into banks
Democratic House of Representatives Speaker Nancy Pelosi told a private meeting of Democrats that they would no longer be pursuing their proposal to amend the bankruptcy laws to allow judges to suspend repossession notices on foreclosed homes.
Republicans had feared that such a move would discourage banks from issuing new mortgages.
And in a further a sign of movement, the House Republicans, who have expressed the strongest opposition to the emerging deal, dispatched their second-ranking leader, Roy Blunt, to join the talks.
The Bush administration appeared to move to appease its Republican opponents by agreeing to include - but only as an option - their proposal to insure distressed mortgage bonds rather than buying them outright from Wall Street firms, the centrepiece of the government's proposal to unfreeze the financial markets.
Blame gameBlame game
While both Republican Senator John McCain and Democrat Senator Barack Obama endorsed the need for a compromise plan, their responses also revealed differences over who was to blame for the crisis. During a live TV debate both Republican Senator John McCain and Democrat Senator Barack Obama endorsed the need for a compromise plan.
But their responses also revealed differences over who was to blame for the crisis.
"We also have to recognise that this is a final verdict on eight years of failed economic policies promoted by George Bush, and supported by Senator McCain," Senator Obama said."We also have to recognise that this is a final verdict on eight years of failed economic policies promoted by George Bush, and supported by Senator McCain," Senator Obama said.
Senator McCain, meanwhile, blamed the crisis on irresponsible leadership in Washington and Wall Street, and said he would consider a freeze on non-military spending to pay the costs of the bail-out.Senator McCain, meanwhile, blamed the crisis on irresponsible leadership in Washington and Wall Street, and said he would consider a freeze on non-military spending to pay the costs of the bail-out.
Democratic concessions
Ms Pelosi told a private meeting of Democrats that they would no longer be pursuing their proposal to amend the bankruptcy laws to allow judges to suspend repossession notices on foreclosed homes.
Republicans feared that such a move would discourage banks from issuing new mortgages.
In a sign of movement, the House Republicans, who have expressed the strongest opposition to the emerging deal, dispatched their second-ranking leader, Roy Blunt, to join the talks.
I am convinced that by Sunday we will have an agreement that people will understand on this, on this Bill Barney Frank, chairman, House Financial Service Committee Rescue deal stalemateBail-out: the sticking pointsMore cash injected into banks
Ms Pelosi said that "would be a bill that will be signed by the President and we will be working through the weekend to achieve that end."
Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Committee, said: "I am convinced that by Sunday we will have an agreement that people will understand".
The Bush administration appeared to move to appease its Republican opponents by agreeing to include - but only as an option - their proposal to insure distressed mortgage bonds rather than buying them outright from Wall Street firms, the centrepiece of the government's proposal to unfreeze the financial markets.
Voter worriesVoter worries
Congressmen of both parties are anxious to get back to their constituencies in order to fight the election which takes place on 4 November.Congressmen of both parties are anxious to get back to their constituencies in order to fight the election which takes place on 4 November.
A meeting on Thursday ended in acrimony Nancy Pelosi and Barney Frank are hopeful a deal can be struck
But they are also worried by growing evidence that most Americans are sceptical about the bail-out deal, and especially about how much it will costBut they are also worried by growing evidence that most Americans are sceptical about the bail-out deal, and especially about how much it will cost
The latest opinion poll, from the Associated Press-Knowledge Networks, taken on Friday, showed that only 30% expressed support for the bail-out package, while 45% were opposed and 25% undecided, despite the dramatic appeals of President George W Bush and Treasury Secretary Henry Paulson that the move was necessary to save the US economy.The latest opinion poll, from the Associated Press-Knowledge Networks, taken on Friday, showed that only 30% expressed support for the bail-out package, while 45% were opposed and 25% undecided, despite the dramatic appeals of President George W Bush and Treasury Secretary Henry Paulson that the move was necessary to save the US economy.
The widespread public opposition is one reason that the Congressional leadership wants a bi-partisan deal before they are prepared to put the proposals to a vote.The widespread public opposition is one reason that the Congressional leadership wants a bi-partisan deal before they are prepared to put the proposals to a vote.
They do not want to face the voters unless they can show that Congress acted on a united front because of the urgency of the crisis.They do not want to face the voters unless they can show that Congress acted on a united front because of the urgency of the crisis.
Market wobblesMarket wobbles
Financial markets have been nervously watching the ebb and flow of the bail-out negotiations.Financial markets have been nervously watching the ebb and flow of the bail-out negotiations.
On Friday, European markets fell sharply, but rumours that negotiations had resumed boosted stocks on Wall Street, where the Dow Jones average of leading shares finished in positive territory. On Friday, European markets fell, but rumours that negotiations had resumed boosted stocks on Wall Street, where the Dow Jones average of leading shares finished in positive territory.
Meanwhile, central banks injected liquidity into the financial system to prevent inter-bank lending from seizing up, with the US Federal Reserve taking the lead by organising swaps with other central banks across the world, including Japan, the UK, Switzerland, and Australia.Meanwhile, central banks injected liquidity into the financial system to prevent inter-bank lending from seizing up, with the US Federal Reserve taking the lead by organising swaps with other central banks across the world, including Japan, the UK, Switzerland, and Australia.
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