The Wall Street Journal is reporting the top House and Senate Democratic and Republican lawmakers, after a three-hour meeting have reached a “fundamental bipartisan agreement” on the principles of a $700 billion Wall Street rescue package.
The deal’s structure places limits on executive compensation such as restrictions on “golden parachutes”, and includes oversight of the rescue plan to bail out U.S. financial markets and kick-start the flow of credit.
The $700 billion to buy up bad mortgages and mortgage-related securities on the books of the nation’s banks and other financial firms would be paid out in installments. The Treasury Department would have immediate access to $250 billion, with another $100 billion to follow if needed. The deal is likely to give the government equity warrants in all participating companies.
Still unresolved, notes the Journal, is the issue of whether or not to include changes to bankruptcy law that would give judges the right to change the terms of mortgages.
Today’s delicate back-room dealing came after a prime-time address by President Bush where he warned that “our entire economy is in danger” if Congress fails to act. Several lawmakers have predicted that the rescue plan would be approved by Congress, but they have not so far provided any specifics.
Emerging from the meeting, Sen. Bob Corker (R., Tenn.) said:
“I believe that we will pass this legislation before the markets open on Monday.”
The unprecedented plan will now go back to congressional leadership and the White House for ultimate approval.
Fed Chair Bernanke and Treasury Secretary Paulson have persistently made the case for a fast and constructive conclusion leading to a speedy enactment of the critical plan.
Update 1: Congressional leaders are currently in a meeting with President Bush discussing the plan. The meeting includes presidential hopefuls John McCain and Barack Obama.
Update 2: The meeting between the White House and congressional leaders has ended without a final agreement being reached. However, both parties pledged to continue working together until a deal is finalized.
“There is a clear sense of urgency and agreement on the need to stabilize the financial markets, and prevent a massive financial crisis from affecting everybody in America,” White House spokeswoman Ms. Perino said after the meeting. [WSJ]