Bush, Lawmakers Rush Forward on Bailout Plan

By: CBS News
By: CBS News
** FILE ** In this May 9, 2008 file photo. a foreclosure sign stands outside a home in Denver.  The optimism that surrounds a new president taking office cannot resurrect home values overnight, and presidents have no direct ability to reduce rising mortgage rates. Nevertheless, Democrat Barack Obama and Republican John McCain both promise help for homeowners facing foreclosure.  (AP Photo/David Zalubowski, File)

** FILE ** In this May 9, 2008 file photo. a foreclosure sign stands outside a home in Denver. The optimism that surrounds a new president taking office cannot resurrect home values overnight, and presidents have no direct ability to reduce rising mortgage rates. Nevertheless, Democrat Barack Obama and Republican John McCain both promise help for homeowners facing foreclosure. (AP Photo/David Zalubowski, File)

WASHINGTON - 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 the Democrats' plan, companies who participate in the bailout must agree to limit executive pay, bonuses, and severance packages, reports CBS News correspondent Bob Orr.

Wall Street barons are among America's highest paid, Orr reports. The CEO of Goldman Sachs last year made $70 million; his counterpart at JP Morgan made nearly $28 million; and the head of Merrill Lynch earned $24 million.

Under other additions the Democrats are asking to the administration package, according to a draft of the Congressional plan obtained Monday by Politico.com and 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.

Dodd told CBS's The Early Show on Monday that taxpayers should be "first in line" to get money back once conditions in the industry stabilize and recover.

"We want oversight," he said, adding, "It's important that we act quickly, but it's more important that we act responsibly."

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.


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