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Executives whose companies get a piece of the
$700 billion government bailout will have their pay packages
strictly limited under proposals that are broadly supported by both
Republicans and Democrats in Congress.

The Bush administration was resisting the move as it scrambled
to overcome widespread misgivings on Capitol Hill and swiftly push
through its plan to rescue tottering financial firms by buying up
their rotten assets.

Lawmakers in both parties are demanding changes to the
administration's rescue proposal despite dire warnings from top
economic officials of recessions, layoffs and lost homes if
Congress doesn't approve it quickly. Both parties' presidential
candidates also insist on alterations to the drastic prescription.

"We have got to look at some alternatives," said Sen. Richard
Shelby of Alabama, the top Republican on the Senate Banking
Committee.

Sen. Chris Dodd, D-Conn., the panel's chairman, said the Bush
administration's position was "not acceptable."

Meanwhile, world stock markets were mixed Wednesday amid reports
of a plan by Warren Buffett to invest at least $5 billion in the
embattled Wall Street firm Goldman Sachs. That development helped
allay some fears about the world's troubled financial sector, but
uncertainty in many quarters internationally about the massive U.S.
economic rescue plan persisted.

Congressional leaders say they are working to approve the rescue
by week's end, but the chances of a quick deal were dwindling.

"Just because God created the world in seven days doesn't mean
we have to pass this bill in seven days," said Rep. Joe Barton,
R-Texas.

Rep. Barney Frank, D-Mass., the House Financial Services
Committee chairman, was in intense negotiations with Treasury
Secretary Henry Paulson on key elements of the plan.

"As long as it looks as if we are seriously engaged, it's not
too late" to act, Frank said.

Law enforcement officials, meanwhile, said Tuesday that the FBI
was investigating four major U.S. financial institutions whose
collapse helped trigger the bailout plan.

Two law enforcement officials said the FBI was looking at
potential fraud by mortgage finance giants Fannie Mae and Freddie
Mac, and insurer American International Group Inc. Additionally, a
senior law enforcement official said Lehman Brothers Holdings Inc.
also is under investigation. The inquiries will focus on the
financial institutions and the individuals who ran them, the senior
law enforcement official said.

The law enforcement officials spoke on condition of anonymity
because the investigations are ongoing and are in the very early
stages.

Frank has proposed adding substantial congressional oversight
over the bailout and a requirement that the government make an
effort to renegotiate as many of the mortgages it purchases in the
rescue as possible to help strapped borrowers stay in their homes.
Paulson was said to be willing to accept those revisions.

Sen. Charles Schumer, D-N.Y., said Wednesday he believes
Congress must act quickly to rebuild the crumbling financial system
but that lawmakers must have a strong supervisory role.

If there are provisions for a return of money in connection with
the absorption of bad debt at various financial institutions, he
said on NBC's "Today" show, "it should go to taxpayers before
bondholders, shareholders and executives."

Sen. Jim DeMint, a South Carolina Republican, differed with
Schumer, saying Congress should resist the Bush administration's
pleas for the legislation. He said, "The government broke it. I
don't trust them to fix it."

The administration was still battling calls from virtually every
quarter of Congress to slap tight limits on compensation for
executives whose firms get a federal rescue. Frank wants the
government to restrict the bailout to firms that deny their top
people golden parachutes on their way out the door and institute a
"clawback" rule to revoke bonuses paid for bogus gains.

Another influential Democrat, Sen. Max Baucus of Montana,
proposed tax penalties on the compensation of top executives who
earn more than the U.S. president; their pay would only be
tax-deductible up to $400,000. Large golden parachutes also would
be taxed heavily under the plan by Baucus, the Finance Committee
chairman.

Paulson says such limits would discourage participation in the
program.

But the curbs appear to have widespread bipartisan support.

"Clipping executive compensation is easy right now - everybody
wants it," said Rep. Jack Kingston, R-Ga.

Frank also has been pushing to allow the government to buy
equity - rather than just bad debt - in companies it helps so
taxpayers can benefit from future profits. That idea is also
gaining bipartisan support, but Paulson argues it would hamstring
the very companies the government is trying to help.

He also is strongly opposed to another key Democratic priority:
letting judges rewrite mortgages to lower bankrupt homeowners'
monthly payments. Democrats view that measure as the heaviest lift
and the most likely to be dropped as part of a final deal.

"I share the outrage that people have," Paulson told the
Senate Banking Committee on Tuesday. "It's embarrassing to look at
this. I think it's embarrassing to the United States of America.
There is a lot of blame to go around."

Without the bailout plan, Paulson and Federal Reserve Chairman
Ben Bernanke have sketched out a grave scenario for lawmakers:
Neither businesses nor consumers would be able to borrow money, and
the world's largest economy would grind to a virtual halt.

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Executives whose companies get a piece of the
$700 billion government bailout will have their pay packages
strictly limited under proposals that are broadly supported by both
Republicans and Democrats in Congress.


Limits gain support as bailout is questioned in Congress

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