The White House bowed on a major sticking point in the $700 billion financial bailout plan Wednesday, and President Bush readied a prime-time speech to the nation as the administration scrambled to pull loudly resistant lawmakers onboard and stave off a deepening economic crisis.
Republican presidential nominee John McCain said he was returning to Washington and was asking Democratic rival Barack Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown that has engulfed the political race as well as Congress less than six weeks before Election Day. Obama's campaign said he was inclined to go ahead with the debate.
Treasury Secretary Henry Paulson said he was agreeing to demands from critics in both parties to limit the pay packages of Wall Street executives whose companies would benefit from the proposed bailout.
"The American people are angry about executive compensation and rightfully so," Paulson told the House Financial Services Committee. "We must find a way to address this in the legislation without undermining the effectiveness of the program."
The issue has been a much-debated point in the struggle to win congressional approval of the historic rescue of the financial industry, though the "golden parachute" money involved would be relatively insignificant compared with the huge sums being talked about.
McCain said the Bush administration's plan seemed headed for defeat and a bipartisan solution was urgently needed.
"I do not believe that the plan on the table will pass as it currently stands, and we are running out of time," he said.
Bush, who says the massive government intervention is needed to stave off economic catastrophe, planned to talk to the American people Wednesday night about how the crisis affects them, said White House press secretary Dana Perino.
Wall Street, down sharply the previous two days, basically marked time, waiting for the next shoe to drop. The Dow Jones industrials declined 29 points.
The heart of the unprecedented plan, dramatically unveiled less than a week ago, involves the government buying up sour assets of tottering financial firms to keep them from going under and to stave off a potentially severe recession and the accompanying lost jobs and further home foreclosures.
The crisis is hardly limited to the United States. Federal Reserve Chairman Ben Bernanke, who warned senators on Tuesday that they must act or face recession, was back on Capitol Hill Wednesday saying that global financial markets are under "extraordinary stress."
Lawmakers in both parties have strenuously objected to the plan over the past two days, Republicans complaining about federal intervention in private business and Democrats pressing to tack on help for beleaguered homeowners.
Paulson, who with Bernanke heard hours of withering criticism at a hearing on Tuesday, met for the second day with House Republicans, some of whom have announced their opposition to any federal bailout of the private financial markets that form the backbone of American capitalism.
Other Republicans appear to be more open to legislation, according to congressional and administration officials, although on different terms than the White House has proposed.
Still, most majority Democrats and minority Republicans say something must be done — and will be soon.
House Speaker Nancy Pelosi met with administration officials and then told reporters, "We're moving in a productive direction." She declined to discuss specifics.
Amid speculation that votes on any legislation could slip into next week, she said, "We'll finish it when it's ready. I'd rather it be sooner rather than later."
She has insisted Republican lawmakers must stand up for their own president's proposal, but they appear anything but eager to do so.
"It's a tough sell to most of our members," said Rep. Tom Davis, R-Va., after a closed-door meeting with Paulson and Bernanke. "It's a terrible plan, but I haven't heard anything better."
Compounding the administration's challenge, Republicans and Democrats both say Bush has lost credibility, particularly in cases where he argues there will be dire consequences if Congress doesn't act.
"They sold the war, they sold the stimulus package and some other
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