Officials Scramble to Get Bailout Legislation Together

By: • Thu, Sep 25 2008, 9:43 AM

After a series of gruelling days, Congress may be closer to hammering out the final details for the financial bailout package, according to congressional leaders who spent the last several days in talks with Fed and Treasury officials.

In testimony before the House Financial Services Committee on Wednesday, Fed Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson continued to stress the urgency for passing legislation to save the U.S. financial system. The proposal is geared at allowing the U.S. government to purchase illiquid assets from financial institutions and unfreeze credit markets.

While Paulson and Bernanke had little to add from their opening statements at the Senate Banking Committee on Tuesday, Wednesday's testimony focused on the potentially disastrous consequences of inaction, including higher unemployment and slower economic growth.

Speaking to media following the meeting, Senate Banking Committee Chairman Chris Dodd said a deal is just days away, while House Financial Services Committee Chairman Barney Frank said it is looking more likely that the bill will pass.

At 10 a.m. EDT on Thursday, congressional leaders from both parties will hold a meeting to continue crafting the financial bailout package.

On the executive side, late on Wednesday, U.S. President George Bush said the entire U.S. economy is in danger and that failure to pass the $700 billion bailout plan proposed by the U.S. Treasury would cost more money later.

Bush addressed viewers in a televised speech Wednesday night. He said he understands the resistance in Congress to spend taxpayers' money on Wall Street's mistake, but said if the plan doesn't pass "we could experience a long, painful recession." Bush said banks could fail and foreclosures could rise.

Responding to a request by Bush to discuss the situation, U.S. Presidential hopefuls Barack Obama and John McCain travelled back in Washington on Thursday and plan to meet with Bush at 3:55 p.m. EDT.

McCain announced on Wednesday that he would like to hammer out the final details of the plan before attending a Presidential debate against Obama at the University of Mississippi on Friday, while Obama argues that the debate should take place as scheduled.