US lawmakers said they had made a breakthrough in talks on a $700 billion plan to revive the credit markets and expected to announce an agreement on legislation later in the day.
Negotiators resolved “our differences so we can go forward with a package to stabilise the market,” House Speaker Nancy Pelosi told reporters when negotiations at the Capitol ended after midnight Washington time. Lawmakers will review a written version of the plan later today, she said. The House may vote tomorrow.
Treasury Secretary Henry Paulson said lawmakers were on the brink of “a deal which will work and be effective” in the marketplace. More work needs to be done, “but I think we’re there,” he said.
The plan would authorise the Treasury to begin purchasing distressed debt securities from financial companies affected by the record number of home foreclosures.
Senate Majority Leader Harry Reid, a Nevada Democrat, said yesterday that he wanted a deal to reassure investors before Asian financial markets open late today.
Paulson and Federal Reserve Chairman Ben S Bernanke said the rescue plan was necessary to revive lending and to restore the flow of credit to the US economy. President George W Bush warned that legislative action was needed to avoid a “deep and painful recession.”
Lawmakers had resisted giving Paulson unrestricted power to buy the debt and sought controls to assuage angry constituents, who bombarded Congressional offices with e-mails and phone calls.
Voters “don’t want a bailout of Wall Street and neither do we,” Democratic Senator John Kerry of Massachusetts told reporters yesterday. “What we are talking about is not losing 3 million jobs in a matter of weeks” and helping “small banks and small businesses literally keeping their doors open.”
