The 3 major U.S. automakers are getting closer to being approved for their corporate welfare checks:

A bailout plan for the failing U.S. auto industry could include a Cabinet-level oversight board and a provision to withdraw the money if the overseers decide the companies are failing to take steps to overhaul themselves.

The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. The size of the package hasn’t been finalized, but it is expected to be about $15 billion, several congressional aides said.

It would create a board composed of Cabinet secretaries from the departments of Treasury, Energy, Labor, Commerce and Transportation plus the Environmental Protection Agency administrator to oversee a broad auto industry restructuring. A congressional aide outlined the emerging measure on condition of anonymity because it is not yet completed.

In return for the money, the carmakers would have to agree to terms similar to those placed on banks that receive funds under the $700 billion Wall Street bailout: to limit their top executives’ pay packages, cease paying dividends, give the government a chunk of future gains and guarantee that taxpayers would be reimbursed before any other shareholders, the aide said.

The bill under discussion would place the special investigator overseeing the bank rescue in charge of keeping tabs on the auto bailout.

The White House and Democratic congressional leaders are narrowing their differences over the auto bailout, but had yet to agree on specific legislative details, officials said.

Sen. Chris Dodd, D-Conn., chairman of the Banking Committee, said Sunday that General Motors Corp.’s chief executive, Rick Wagoner, “has to move on” as part of a government-run restructuring.

“I think you have got to consider new leadership,” Dodd said on CBS’ “Face the Nation.”

Criticized for staying on the sidelines until now, President-elect Barack Obama voiced support Sunday for the bailout legislation being drafted in Congress. He accused car industry executives of a persistent “head-in-the sand approach” to long-festering problems.

In an appearance on NBC’s “Meet the Press,” Obama said Congress was doing “the exact right thing” in drafting legislation that “holds the auto industry’s feet to the fire” at the same time it tries to prevent its demise.

GM spokesman Steve Harris said the company appreciates Dodd’s support for the loans, but added, “GM employees, dealers, suppliers and the GM board of directors feel strongly that Rick is the right guy to lead GM through this incredibly difficult and challenging time.”

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Washington was looking a lot like the local food stamp office today. The only difference is that the recipients are eligible for enough assistance to buy a damn country:

U.S. automakers drew fresh skepticism from lawmakers Thursday in a rocky confrontation over their pleas for an expanded $34 billion rescue package they say they need to survive. Congressional analysts said one bailout plan under consideration would fall short of what the carmakers want.

With time on the current Congress running out, opposition to the bailout appeared to be as strong as last week — before Detroit’s Big Three auto chiefs returned to Capitol Hill with more detailed plans on how they would spend the money.

Several lawmakers in both parties are pressing the automakers to consider a so-called “pre-packaged” bankruptcy in which they would negotiate with creditors in advance and downsize, then file for Chapter 11 protection in hopes of emerging quickly as stronger companies. The Big Three have publicly shunned the notion, saying it would kill sales by destroying customers’ confidence — but executives have indicated in recent days that it might ultimately be necessary…

…United Auto Worker union President Ron Gettelfinger, aligned with the industry in pressing for the aid, told senators at a Banking Committee hearing that any kind of bankruptcy, even a pre-packaged one, was not “a viable option.” Gettelfinger said consumers would not buy autos from bankrupt companies, no matter the terms of the arrangement.

He also warned that in the absence of action by Congress: “I believe we could lose General Motors by the end of this month.” He said the situation was dire and time was of the essence.

Two weeks after a botched attempt on Capitol Hill, U.S. automakers returned to Congress for high-stakes hearings they hope will persuade skeptical lawmakers to save their troubled industry with $34 billion in emergency aid, but a top Senate Democrat wants to hand their problem to the Federal Reserve.
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To make matters worse for the Big Three, Senate Majority Leader Reid told the AP Wednesday “I just don’t think we have the votes to do that now.” Reid was of course referring to passage of the $34 billion bailout package sought by the automakers.

Excerpts From NY Times Liveblog On The Big Three Bailout Hearings:

12:40 p.m.| Is This Enough?: Mark Zandi, the chief economist of Moodys.com, is for a bailout. But he warns that recovery will be slow, in part because the carmakers’ increasingly generous financial offers — all those auto loans that are now in danger of going bad and the big price cuts — were used to pump up demand for too long. That drained future demand.

He warns that “$34 billion may not be enough.”

12:16 p.m. Eastern | It’s about the jobs: Robert Nardelli, Chrysler’s chief, says he is speaking on behalf of “one million people who depend on Chrysler for their jobs.” He says the company’s plan will yield a “product renaissance” that includes electric vehicles “similar to the one I drove here today.” He also says what the automakers are asking is “the least costly alternative considering the depth of the economic crisis.”

12:16 p.m. Eastern | Road trip?: Alan Mulally, Ford’s chief executive, assures the panel that the company is “focused.” And after a long drive to Washington to testify, he offers to return the committee’s hospitality. “We invite you to visit us in Dearborn and kick the tires,” he says.

12:11 p.m. Eastern | No room for scapegoats: Now a word from the workers. Ron Gettelfinger, the head of the United Auto Workers, speaks up for federal help — but also for his members. “The U.A.W. recognizes that the crisis may require further sacrifices by the employees,” he says, but the union “vigorously opposes any attempt to make workers and retirees the scapegoat.” He also says it’s not feasible for Congress to work out details of a complex restructuring plan in the course of the coming week.

12:07 p.m. Eastern | Learning from mistakes: Rick Wagoner, the chief of General Motors, goes first, saying that the automakers here today because they’ve mistakes. In the course of putting together its rescue appeal, he said, “we tried to learn from our contributions and our successes and also from our mistakes” over the course of G.M.’s 100-year history.

10:20 a.m. Eastern | Russian roulette: Christopher Dodd, the chairman of the committee, has made up his mind before hearing any witness. To turn down the automakers, he says, would be playing “Russian roulette” with the economy.

I’m a Democrat but I have to agree with Mike Huckabee on this one. The companies should be denied this assistance and be forced to work it out themselves. This is a free enterprise system and when you go into business you take a chance at failing. If I thought that the automakers would do the right thing with the money then maybe I’d be on board. But i know these corporate types and their first priority will be to figure out how they can benefit financially from the money to line their greedy pockets.

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More welfare for corporate America:

The government was weighing a plan on Sunday to rescue Citigroup Inc., whose stock has been hammered on worries about its financial health.

The Treasury Department and the Federal Reserve have been in discussions over the weekend to devise a strategy to stabilize the company, according to people familiar with the talks. They spoke on condition of anonymity because the discussions were ongoing.

One option being considered is taking some of the risky assets held by Citigroup off its balance sheet, a move that would give the company more breathing room and put it in a better position to raise capital. It was unclear, however, exactly how that option might be structured, the people said.

A spokesman for New York-based Citigroup declined comment.

The company has seen its shares lose 60 percent of their value in the past week, reflecting a crisis of confidence among skittish investors. They are worried all the risky debt on Citigroup’s balance sheet will turn into losses as the economy worsens and the markets stay turbulent - losses that could be nearly impossible to reverse.

Citigroup is such a large, interconnected player in the financial system that if it were to collapse it would wreak havoc on already fragile financial and economic conditions. The company has operations stretching around the globe in more than 100 countries.

Analysts consider Citigroup the most vulnerable among the major U.S. banks - especially after it failed to nab Wachovia Corp., which was bought instead by Wells Fargo & Co. That was a missed opportunity for Citi to gets its hands on much-needed U.S. deposits that would bolster its cash position.

Citigroup was especially hard hit by the meltdown in risky, subprime mortgages made to people with tarnished credit or low incomes. Foreclosures on those mortgages spiked, leaving Citi and other financial companies wracking up huge losses on the soured investments. The company has failed to turn a profit during the past four quarters.

The company has already received a $25 billion from the Treasury Department’s $700 billion financial bailout program. In return for the cash infusion, the government gets a partial ownership stake.

What’s so sad is the way that these corps manipulate the loopholes in the deal which doesn’t even require them to use the money for it’s intended purposes. SMH.

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The U.S. government is dramatically escalating its response to the financial crisis by planning to invest $250 billion in the country’s banks, forcing nine of the largest to accept a Treasury stake in what amounts to a partial nationalization.

People are panicking in the wake of our country’s financial situation:

An unemployed man with an advanced finance degree who was despondent over his own financial problems shot and killed his wife, three children, mother-in-law and then himself in an upscale home in a gated community, police said Monday.

Officers found the bodies Monday morning after the wife failed to show up at a neighbor’s home to go to work, Deputy Chief Michel Moore said. The deaths occurred sometime after Saturday evening.

A handgun that had been bought Sept. 16 was found near the father’s body, Moore said. The father left two suicide notes — one for police and one for friends and relatives — and a will.

The notes attest to the man’s financial difficulties, and he takes responsibility for killing his family members, Moore said.

The family members’ names were not immediately released because police wanted to make sure the children’s schools had time to make grief counselors available. The children were sons ages 19, 12 and 7.

The man had a master’s of business administration in finance, formerly worked for PricewaterhouseCoopers and Sony Pictures, but had been unemployed for several months, Moore said.

Moore did not specify what financial trouble the man had been in. He noted that the family did not own the home. PricewaterhouseCoopers spokesman Steven Silber had no immediate comment. Sony Pictures Entertainment spokesman Steve Elzer did not immediately return a call seeking comment.

The gated community, called Sorrento Pointe, is among several developments along curving lanes and cul-de-sacs set on the foothills of the Santa Susana Mountains in Porter Ranch, about 23 miles northwest of downtown.

Ryan Ransdell, who lives across the street, said the house had been occupied by the family for about a year.

“They didn’t socialize too much,” he said. “They kept pretty much to themselves.”

This is happening while the CEO of Lehman Brothers gets his $484 million annual salary after he was one of the main players pushing for the bailout plan. SMH.

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The House of Representatives approved a $700 billion bailout package for U.S. banks, under pressure from all sides as the effort to head off a spreading financial crisis hung in the balance.

The House approved the financial rescue plan by a vote of 263-171, sending the measure to President George W. Bush and concluding two weeks of legislative haggling in Congress that had roiled and captivated global markets.

Wells Fargo & Co stepped in to buy Wachovia Corp, a bank badly hobbled by the credit crisis, providing a rare bit of positive news for the financial sector and sending markets higher.

In new signs of spreading crisis, California said it was running out of money, France said the world stood on the “edge of the abyss” and European leaders were divided over their own response to the global crisis.

The House had shocked world markets on Monday by rejecting a previous draft. With elections on November 4, lawmakers from both parties were wary of voter backlash in asking taxpayers to pay for Wall Street’s mistakes.

On Friday, speaker after speaker from both parties said rejecting the bailout could have devastating consequences for an already slowing U.S. economy, arguing the bill was as important for small businesses, homeowners, students and pensioners as it was for the financial sector.

“While the focus has been on the Dow Jones and Wall Street, we are addressing the real pain felt by Mr. and Mrs. Jones on Main Street,” said House Speaker Nancy Pelosi, a California Democrat.

Said House Republican leader John Boehner: “We have to act, and if we do not this crisis is likely to worsen and put us into an economic slump like many of us have never seen.”

The bill would allow the Treasury to buy toxic debt from U.S. banks, which many economists said is needed to head off the worst financial crisis since the Great Depression.

U.S. stocks rose on hopes for the bailout plan and the deal to buy Wachovia.

Wells Fargo, one of the strongest U.S. banks, said it didn’t need the government help that Citigroup Inc required in an earlier effort to rescue Wachovia.

The dollar continued to rally against the euro and European stocks rose about 3 percent.

Earlier on Friday, the United States reported its biggest monthly job loss in 5 1/2 years, more evidence of an approaching recession. Data showed the U.S. services sector holding up.

“The data has been horrible all week long. It absolutely does put pressure on them to get this rescue act passed,” said Fred Dickson, market strategist at D.A. Davidson and Co in Lake Oswego, Oregon. “It’s a bill with risks, but it’s a plan and the market needs a plan.”

In California, Gov. Arnold Schwarzenegger warned the U.S. Treasury the state may need short-term federal loans because it can’t raise money in frozen credit markets.

A collapse in the U.S. housing market and resulting bad mortgages have shattered confidence in the financial sector, with banks across the United States and Europe needing support from governments or outside investors this week.

Interbank lending and credit to businesses and private individuals has all but seized up. Central banks have injected billions of dollars to maintain some flow of funds.

‘ON THE EDGE OF THE ABYSS’

French Prime Minister Francois Fillon, whose country is hosting an emergency summit with Italian, British and German leaders on Saturday, said only collective action could solve the financial crisis. He said he would not rule out any solution to stop any bank failing.

“The world is on the edge of the abyss because of an irresponsible system,” Fillon said, alluding to widespread anger over past lax regulation of financial markets and excessive lending.

Fillon said President Nicolas Sarkozy would propose at the emergency meeting measures to unfreeze credit and coordinate economic and monetary strategies.

In Britain, Prime Minister Gordon Brown shook up his cabinet and authorities took three separate steps to try to shore up the financial system.

Bad news mounted in the European financial sector.

In Switzerland, UBS AG, hardest hit among European banks by its exposure to subprime-related holdings, said it would cut 2,000 investment banking jobs — on top of the 4,100 positions cut in the past year.

Worries grew that even if Washington agrees on the package, it will not be enough to resolve deeper-rooted weakness in the global economy.

Divisions have emerged within Europe over the past week, with Ireland offering guarantees on bank deposits, prompting a flight of capital from British lenders to Irish banks, and Greece promising to safeguard savers’ cash.

EU partners said Ireland’s move could break competition rules and threatened the unity necessary to ensure an ordered approach to turmoil ahead.

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In a bold bid to revive President Bush’s multibillion-dollar financial rescue plan, Senate leaders scheduled a vote for Wednesday night on a version of the bill that adds substantial tax cuts meant to appeal to Republicans when it reaches the House.

The goal is to net at least 12 more House votes than the rescue proposal received Monday, when lawmakers rocked the political and financial worlds by rejecting it.

The gambit is certain to anger some conservative House Democrats, who object to tax cuts that are not offset with spending cuts. But Senate strategists assume it will gain more House votes than it will lose.

If so, Congress would be poised to pass landmark legislation giving the government billions of dollars to buy deeply discounted mortgage-backed securities that are choking off credit and roiling the markets.

The strategy is risky because some House members might see it as a high-handed move by senators. Senate passage of a bailout measure has seemed assured all along. The showdown is in the House, but now the Senate is trying to force the House’s hand.

Sen. Charles Schumer, D-N.Y., called it “a brilliant move” that will “help pick up votes on both sides of the aisle.”

House Speaker Nancy Pelosi’s reaction was much cooler. “The Senate has made a decision about how to proceed and what can pass that body,” the California Democrat said. “The Senate will vote tomorrow night, and the Congress will work its will.”

The new approach, announced Tuesday night by Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., would tack large and contentious tax measures to the bailout bill. Senate leaders figure the House will have to approve it because the tax cuts are too appealing to Republicans and the financial rescue plan will still seem essential to most Democrats.

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In an extraordinary gamble on the future of the global economy, the House of Representatives voted down the $700 billion Wall Street bill 205-228, as Republicans defied their president, their presidential nominee and their leaders to vote nearly two to one against the measure described as crucial to the prevention of an economic collapse.

At the vote progressed, the Dow steadily dropped, reaching a 700-point decline at one point. Frantic television coverage of the vote was paired with a split-screen showing stocks plunging by hundreds of points within just a few minutes. Members, who are all equipped with Blackberrys, were fully aware of the market trends driven by their balloting.

Almost every member of the House was present during the roll call. Democratic leaders huddled with members, desperately trying to persuade defectors to change their votes. Republican leaders, in contrast, appeared resigned to the overwhelming opposition in their caucus. After the vote, House Republican Leader John Boehner of Ohio told reporters he was “disappointed” with the outcome.

While the economic consequences of the vote will be determined during the coming weeks, the outcome this afternoon was a major setback to John McCain, who had backed the proposal and had portrayed himself as a party leader who would help win approval for the bailout. Instead, members of his own party voted 133 to 65 against the measure.

In contrast, Democrats voted 141 to 94 for the bill.

There very likely will be an attempt to try to pass the bill again, although it is not clear how soon that would take place. Republican Congressman Joe Barton of Texas asked if he could move for reconsideration and if he did, how soon would it be taken up. He was told by House parliamentarians that it would be taken up immediately — too soon for supporters to regroup — so he put off his motion.

A House aide said no additional votes would be held in the House until after the Senate takes up the package, scheduled for Wednesday.

Before the vote, President Bush issued a statement that proved to be futile.

“A vote for this bill is a vote to prevent economic damage to you and your community,” Bush said, “This is a bold bill that will keep the crisis in our financial system from spreading through our economy.”

Addressing the full House during the debate, Democratic Speaker Nancy Pelosi said, “I know that we will live up to our side of the bargain, I hope the Republicans will, too.”

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Congressional leaders and the White House agreed Sunday to a $700 billion rescue of the ailing financial industry after lawmakers insisted on sharing spending controls with the Bush administration. The biggest U.S. bailout in history won the tentative support of both presidential candidates and goes to the House for a vote Monday.

The plan, bollixed up for days by election-year politics, would give the administration broad power to use billions upon billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved financial firms.

President Bush called the vote a difficult one for lawmakers but said he is confident Congress will pass it. “Without this rescue plan, the costs to the American economy could be disastrous,” Bush said in a written statement released by the White House. He was to speak publicly about the plan early Monday morning, before U.S. markets open.

Flexing its political muscle, Congress insisted on a stronger hand in controlling the money than the White House had wanted. Lawmakers had to navigate between angry voters with little regard for Wall Street and administration officials who warned that inaction would cause the economy to seize up and spiral into recession.

A deal in hand, Capitol Hill leaders scrambled to sell it to colleagues in both parties and acknowledged they were not certain it would pass. “Now we have to get the votes,” said Sen. Harry Reid, D-Nev., the majority leader.

Rep. John A. Boehner, R-Ohio, the House minority leader, said he was urging “every member whose conscience will allow them to support this” to back it, but officials in both parties expected the vote to be a nail-biter.

The final legislation was released Sunday evening, and Republicans and Democrats huddled for hours in private meetings to learn its details and voice their concerns.

Many said they left undecided, and leaders were scrambling to put the most positive face on a deeply unpopular plan.

“This isn’t about a bailout of Wall Street, it’s a buy-in, so that we can turn our economy around,” said House Speaker Nancy Pelosi, D-Calif.

The largest government intervention in financial markets since the Great Depression casts Washington’s long shadow over Wall Street. The government would take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.

“I don’t know of anyone here who wants the center of the economic universe to be Washington,” said a top negotiator, Sen. Chris Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee. But, he added, “The center of gravity is here temporarily. … God forbid it’s here any longer than it takes to get credit moving again.”

The plan would let Congress block half the money and force the president to jump through some hoops before using it all. The government could get at $250 billion immediately, $100 billion more if the president certified it was necessary, and the last $350 billion with a separate certification _ and subject to a congressional resolution of disapproval.

Still, the resolution could be vetoed by the president, meaning it would take extra-large congressional majorities to stop it.

As Bush’s team stepped up its efforts to corral reluctant Republicans, the White House released a letter from his budget chief, Jim Nussle, to Boehner saying the measure would cost taxpayers “considerably less” than its eye-popping $700 billion total.

Lawmakers in both parties were poring over the 110-page bill. Democratic leaders have made it clear they will not support the rescue unless a substantial number of Republicans join them.

“It will take two to make this work,” said Rep. Rahm Emanuel, D-Ill.

But it was a tough sell for lawmakers in both parties.

Rep. Joe Barton, R-Texas, an opponent, estimated that half of the House’s 199 Republicans are “truly undecided.”

Lawmakers who struck a post-midnight deal on the plan with Treasury Secretary Henry Paulson predicted final congressional action might not come until Wednesday.

The proposal is designed to end a vicious downward spiral that has battered all levels of the economy. Hundreds of billions of dollars in investments based on mortgages have soured and cramped banks’ willingness to lend.

“If we do not do this, the trauma, the chaos and the disruption to everyday Americans’ lives will be overwhelming, and that’s a price we can’t afford to risk paying,” Sen. Judd Gregg, the chief Senate Republican in the talks, told The Associated Press.

Rep. Barney Frank of Massachusetts, the House Financial Services Committee chairman, predicted the measure would pass, though not by a large majority.

“It’s not a bill that any one of us would have written. It’s a much better bill than we got. It’s not as good as it should be,” he said.

A breakthrough came Saturday night, with the addition of a requirement sought by centrist Democrats and Republicans to ensure that the government be paid back by companies that got help. The president would have to tell Congress after five years how he planned to recoup the losses.

Another key bargain _ this time to draw Republican support _ allows, but doesn’t require, government to insure some bad home loans rather than buy them. That’s designed to limit the amount of federal money used in the rescue.

“This is something that all of us will swallow hard and go forward with,” said Republican presidential nominee John McCain.

His Democratic rival Barack Obama sought credit for taxpayer safeguards added to the initial proposal from the Bush administration. Later, at a rally in Detroit, Obama said, “it looks like we will pass that plan very soon.”

The rescue would only be open to companies who deny their executives “golden parachutes” and limit their pay packages. Firms that got the most help through the program _ $300 million or more _ would face steep taxes on any compensation for their top people over $500,000.

The government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in recipients’ future profits.

To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers’ monthly payments so they can keep their homes.

But Democrats surrendered other cherished goals: letting judges rewrite bankrupt homeowners’ mortgages and steering any profits gained toward an affordable housing fund.

It was Obama who first signaled Democrats were willing to give up some of their favorite proposals. He told reporters Wednesday that the bankruptcy measure was a priority, but that it “probably something that we shouldn’t try to do in this piece of legislation.”

Frank negotiated much of the compromise in a marathon series of up-and-down meetings and phone calls with Paulson, Dodd, D-Conn., and key Republicans including Gregg and Blunt.

Pelosi shepherded the discussions at key points, and cut a central deal Saturday night _ on companies paying back taxpayers for any losses _ that gave momentum to the final accord.

An extraordinary week of talks unfolded after Paulson and Ben Bernanke, the Federal Reserve chairman, went to Congress 10 days ago with ominous warnings about a full-blown economic meltdown if lawmakers did not act quickly to infuse huge amounts of government money into a financial sector buckling under the weight of toxic debt.

The negotiations were shaped by the political pressures of an intense campaign season in which voters’ economic concerns figure prominently. They brought McCain and Obama to Washington for a White House meeting that yielded more discord and behind-the-scenes theatrics than progress, but increased the pressure on both sides to strike a bargain.

Lawmakers in both parties who are facing re-election are loath to embrace a costly plan proposed by a deeply unpopular president that would benefit perhaps the most publicly detested of all: companies that got rich off bad bets that have caused economic pain for ordinary people.

But many of them say the plan is vital to ensure their constituents don’t pay for Wall Street’s mistakes, in the form of unaffordable credit and major hits to investments they count on, like their pensions.

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Hopefully this agreement will work and not put most of the burden on the American taxpayers:

Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession.

House Speaker Nancy Pelosi announced the $700 billion accord just after midnight but said it still has to be put on paper.

“We’ve still got more to do to finalize it, but I think we’re there,” said Treasury Secretary Henry Paulson, who also participated in the negotiations in the Capitol.

“We worked out everything,” said Sen. Judd Gregg, R-N.H., the chief Senate Republican in the talks.

Congressional leaders hope to have the House vote on the measure Monday. A Senate vote would come later.

The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.

At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.

The legislation would place “reasonable” limits on severance packages for executives of companies that benefit from the rescue plan, said a senior administration official who was authorized to speak only on background. It would affect fired executives of financial firms, and executives of firms that go bankrupt. Some of the provisions would be retroactive and some prospective, the official said.

Also, the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies’ future profits.

To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers’ monthly payments so they can keep their homes.

The measure’s main elements were proposed a week ago by the Bush administration, with Paulson heading efforts to push it through the Democratic-controlled Congress. Democrats insisted on greater congressional oversight, more taxpayer protections, help for homeowners facing possible foreclosure, and restrictions on executives’ compensation.

To some degree, all those items were added.

At the insistence of House Republicans, who threatened to sidetrack negotiations at midweek, the insurance provision was added as an alternative to having the government buy distressed securities. House Republicans say it will require less taxpayer spending for the bailout.

But the Treasury Department has said the insurance provision would not pump enough money into the financial sector to make credit sufficiently available. The department would decide how to structure the insurance provisions, said Sen. Kent Conrad, D-N.D., one of the negotiators.

Money for the rescue plan would be phased in, he said. The first $350 billion would be available as soon as the president requested it. Congress could try to block later amounts if it believed the program was not working. The president could veto such a move, however, requiring extra large margins in the House and Senate to override.

Despite the changes made during an intense week of negotiations, the heart of the program remains Bush’s original idea: To have the government spend billions of dollars to buy mortgage-backed securities whose value has plummeted as hundreds of thousands of Americans have defaulted on their home loans.

Senate Majority leader Harry Reid, D-Nev., said Saturday that the goal was to come up with a final agreement before the Asian markets open Sunday night. “Everybody is waiting for this thing to tip a little bit too far,” he said, so “we may not have another day.”

Hours later, when he and others told reporters of the plan in a post-midnight news conference, Reid referred to the sometimes testy nature of the negotiations.

“We’ve had a lot of pleasant words,” he said, “and some that haven’t always been pleasant.”

“We’re very pleased with the progress made tonight,” said White House spokesman Tony Fratto. “We appreciate the bipartisan effort to deal with this urgent issue.”

It was not immediately clear how many House Republicans might vote for the measure. With the election five weeks away, Democrats have said they would not push a plan that appeared sharply partisan in nature.

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