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Scrambling for a quick accord on the $700
billion bailout, the Bush administration and leading lawmakers have
agreed to include mortgage aid and strong congressional oversight
along with unprecedented help for failing financial institutions, a
key lawmaker said Monday.

      Unimpressed, investors sent stocks plummeting anew, pushed oil
up $16 a barrel and propelled gold prices ever higher as they
searched for a safe place to park their money.

      President Bush prodded Congress to pass the administration's
rescue plan quickly, declaring, "The whole world is watching."


And there did seem to be movement in talks between the White House
and Capitol Hill.


      Rep. Barney Frank, D-Mass., chairman of the House Financial
Services Committee, said "a great deal of progress has already
been made."

And a government official with knowledge of the talks
said the administration had agreed to create a plan to help prevent
foreclosures on mortgages it acquires as part of the bailout - a
key demand of Democratic lawmakers.


      Under other additions the Democrats are asking to the
administration package, according to a draft of the plan obtained
by The Associated Press:

      - Judges could rewrite mortgages to lower bankrupt homeowners' monthly payments.


      - Companies that unloaded their bad assets on the government in
the massive rescue would have to limit their executives' pay
packages and agree to revoke any bonuses awarded based on bogus
claims.


      The proposal by Sen. Chris Dodd, D-Conn., the Banking Committee
chairman, would give the government broad power to buy up virtually
any kind of bad asset -- including credit card debt or car loans --
from any financial institution in the U.S. or abroad in order to
stabilize markets.


      But it would end the program at the end of next year, instead of
creating the two-year initiative that the Bush administration has
sought. And it would add layers of oversight, including an
emergency board to keep an eye on the program with two
congressional appointees, and a special inspector general appointed
by the president.


      The plan also would require that the government get shares in
the troubled companies helped by the rescue.


      Wall Street didn't seem comforted. The Dow Jones industrials
were down nearly 400 points near the end of the trading day.


      Investors were uncertain just how successful the
administration's plan will be in unfreezing credit markets, which
many businesses depend on to fund day-to-day operations, and for
propping up the still-weak housing market.


      Congressional aides said the House could act on a bailout bill
as early as Wednesday.

      Bush said, "Obviously, there will be differences over some
details, and we will have to work through them. That is an
understandable part of the policy making process." 

But he also
said, "It would not be understandable if members of Congress
sought to use this emergency legislation to pass unrelated
provisions, or to insist on provisions that would undermine the
effectiveness of the plan."


      The proposal that Dodd sent to Treasury Secretary Henry Paulson
would let judges modify the mortgages of homeowners in bankruptcy
to allow them to keep their homes.


      It also would require that the government come up with "a
systematic approach for preventing foreclosure" on the mortgages
it acquires as part of the bailout. That would include the home
loans held by Fannie Mae and Freddie Mac, the troubled mortgage
giants now under the control of a government regulator.


      Treasury spokeswoman Brookly McLaughlin said, "We are confident
that we can get a bill done this week."


      The fast-moving negotiations between the administration and
Congress unfolded a day after the government approved a request by
investment houses Goldman Sachs and Morgan Stanley to change their
status to bank holding companies.


      That change will allow the two venerable institutions to set up
commercial banks that will be able to take deposits, significantly
bolstering the resources of both institutions. 


It will also grant
them permanent access to emergency loans supplied by the Fed rather
than the temporary loan status they have had since last March when
the Fed moved to prop up investment banks following the forced sale
of Bear Stearns.


      Frank said that lawmakers "are building strong oversight" into
the new bailout measure.


      "The private sector got us into this mess," he said, "The government has to get us out of it. We do want to do it carefully."


      Republican presidential candidate John McCain, speaking Monday
on NBC's "Today" show, said, "We are in the most serious crisis
since World War II."

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Congress promises quick action on bailout package

Scrambling for a quick accord on the $700
billion bailout, the Bush administration and leading lawmakers have
agreed to include mortgage aid and strong congressional oversight
along with unprecedented help for failing financial institutions.

Congress, Bush team agree on some bailout terms

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