WASHINGTON — Prospects for quick congressional action on the nation's worsening financial crisis dimmed Friday, with House Republicans continuing to balk, some House Democrats making new demands of their own and legislative strategists suggesting action may not come until next Wednesday
House Republicans, whose objections derailed the week-long talks over President Bush's original $700-billion bailout plan, insisted that they wanted an agreement and understood the urgency of the situation.
"We're going into these negotiations with every intention of having a real negotiation, of having a bill that House Republicans can vote for and solving this problem as quickly as we can," Minority Whip Roy Blunt (R-Mo.), the newly designated negotiator for the House Republicans, said Friday.
But there were no meetings above the staff level, and it was not clear what specific changes House Republicans wanted to see in the plan spearheaded by Treasury Secretary Henry M. Paulson.
Blunt's statement said only that the final rescue plan should include "some additional free-enterprise principles."
Stocks posted modest gains Friday, but the continuing frailty of the financial system was demonstrated by the government-brokered seizure and sale late Thursday of Washington Mutual Bank, the biggest U.S. bank failure in history. It was just the latest in a series of collapses of powerhouse financial firms, including Wall Street investment bank Lehman Bros. Holdings Inc. and insurance giant American International Group.
Citing the fragile condition of the financial markets, House Speaker Nancy Pelosi (D-San Francisco) sought to keep the pressure on Congress by ordering a rare weekend session.
"We will not leave until legislation is passed that will be signed by the president," Pelosi said. "The markets need a message from us that we're acting."
Administration and congressional officials have set late Sunday as a deadline, worried that the volatile financial markets will go into full panic if there is no deal before trading resumes next week.
But with no clear consensus on a deal emerging, and with the Jewish holiday of Rosh Hashanah falling on Tuesday, some Capitol Hill aides speculated that a final deal may not come to a vote before Wednesday. The negotiations over the rescue plan were clouded Thursday by the emergence of a Republican-backed proposal for a government-organized insurance program to be paid for by Wall Street. Proponents, who also called for further deregulation and more tax breaks for business, said their approach would not require billions of taxpayer dollars.
