Republicans Balk at Bailout Proposal

Republican congressmen are balking at supporting President Bush's $700 billion plan to exorcise bad mortgage debt from the financial system, which could jeopardize efforts to pass the emergency legislation before the election. House Financial Services Committee Chairman Barney Frank, D-Mass., has warned that Democrats are not going to pass the president's plan without Republican votes. Democratic leaders thought they had an agreement with Republican leaders on the parameters of the $700 billion bailout bill following a closed-door meeting on Thursday. But it became clear at a subsequent White House meeting that House Republicans were not on board. A group of conservative Republicans are pushing an alternative under which the government would insure mortgage-backed securities so the banks could sell them to investors. Democrats have called it "unworkable." At the urging of President Bush, key congressional leaders resumed negotiations on Friday. The president's proposal to purchase troubled mortgage assets from banks remains the centerpiece of the talks. House Financial Services Committee chairman Barney Frank, D-Mass., said he is willing to attach the Republican MBS insurance proposal to the bill to get bi-partisan support. Negotiations will continue over the weekend and Rep. Frank said he is confident they can reach an agreement on Sunday.