WASHINGTON — In a roller-coaster day of hopes raised and hopes dashed, efforts to negotiate a compromise on the $700-billion plan for rescuing the nation's financial system bogged down Thursday, with conservative Republicans denouncing the strategy as ill-conceived and Democrats accusing GOP presidential candidate John McCain of encouraging the revolt.
What remained unclear was whether Thursday's breakdown marked the beginning of the end for the rescue effort, or merely a tumultuous interlude on the way to approving a federal bailout that many in Congress consider unpalatable but unavoidable.
There were signs that, behind the scenes, skeptical Democrats and Republicans were beginning to move toward a compromise version of Treasury Secretary Henry M. Paulson's original plan, but it remained to be seen whether there would be enough votes to pass legislation.
"I'm seeing both Republicans and Democrats start to move toward voting for it," Rep. John Campbell (R-Irvine) said. "I can't tell you that there's a majority at this point, but there's movement."
The working proposal contained most of the features that critics of the administration's original plan had been demanding: limits on compensation for executives of companies that take part in the bailout, a provision for taxpayers to share in any profits from the sale of distressed assets, and payout of the $700 billion in three stages instead of one. The final $350-billion tranche would require a congressional vote.
Republicans, meanwhile, denied that McCain had put obstacles in the way of a deal.
"Focus on a deal that's real," said Sen. Lindsey Graham (R-S.C.), a close McCain ally. "Don't focus on a phony deal and blame John McCain."
Late Thursday, Democrats and Republicans from both houses of Congress, joined by Paulson, returned to the bargaining table in another unsuccessful attempt to craft a proposal that could command majority support. Democratic leaders said they would resume Friday morning without Paulson, but they contended that no deal was possible without at least some House Republican support.
In an assessment echoed by many of his colleagues in both parties, Rep. Howard P. "Buck" McKeon (R-Santa Clarita), an early skeptic who is now convinced that Congress must act, said, "We've got 40 days until an election. You've got a lot of nervous people here. Some of them are totally consumed by the policy. More of them are totally consumed by the politics."
