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Wall St rescue plan 'needs work' Wall St rescue plan 'needs work'
(40 minutes later)
US political leaders are continuing talks on a $700bn (£380bn) bail-out plan to revive the finance sector.US political leaders are continuing talks on a $700bn (£380bn) bail-out plan to revive the finance sector.
After several hours of talks with President George W Bush, members of congress said more work was needed.After several hours of talks with President George W Bush, members of congress said more work was needed.
Presidential candidate Barack Obama, present at the talks with his rival John McCain, said progress had been made on several key points.Presidential candidate Barack Obama, present at the talks with his rival John McCain, said progress had been made on several key points.
Earlier, a leading senator said they had reached "fundamental agreement" on the principles of a deal. Congressional leaders are to meet top government finance officials to try to rework the White House's proposal.
But the Senator, Christopher Dodd, chairman of the Senate Banking Committee, later said it could take beyond Friday's original target date to finish work on the plan before it can go to a vote in Congress. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke were meeting Senate and House members late on Thursday.
Republicans and Democrats have been worried about who will fund the plan. 'Bad plan'
Mr Bush has said he hoped there would be agreement on a rescue deal "very shortly". Emerging from the talks at the White House, legislators said more work was needed on the Bush administration proposal to help get bad debt off the books of finance firms - a situation that has triggered a global credit crisis.
After the talks with President Bush, a leading Democratic senator said it could take could take beyond Friday's original target date to finish work on the plan before it can go to a vote in Congress.
Earlier, Senator Christopher Dodd, chairman of the Senate Banking Committee, had said they had reached "fundamental agreement" on the principles of a deal.
We now expect that we will have a plan that can pass the House, pass the Senate and be signed by the president Republican Senator Robert Bennett of Utah Robert Peston on the planUS stocks up on bail-out hopesBail-out: For and AgainstBernanke demands actionWe now expect that we will have a plan that can pass the House, pass the Senate and be signed by the president Republican Senator Robert Bennett of Utah Robert Peston on the planUS stocks up on bail-out hopesBail-out: For and AgainstBernanke demands action
Legislators were "working on it," said a spokesman for Senate Democratic Majority Leader Harry Reid. But after the White House meeting, the top Republican on the committee, Richard Shelby, told reporters: "I don't believe we have an agreement."
"Still have a lot of issues to be worked on. Making progress. A lot more to discuss," said the spokesman, Jim Manley, as he left the White House talks. He pointed to a letter from leading economists saying the Paulson plan was a "bad plan" and that alternatives should be looked at.
Earlier, Mr Dodd had said Congress could act in the next few days to pass a bill on the subject. Mr Bush has said he hoped there would be agreement on a rescue deal "very shortly" but Republicans and Democrats have been worried about who will fund the plan.
The plan, as it was first proposed last week, would broadly help finance firms offload bad debt, which has triggered a global credit crisis. Legislators were "working on it," said a spokesman for Senate Democratic Majority Leader Harry Reid after the talks.
Details of the package were not immediately available but it is tipped to include restrictions on executives' pay as well as oversight requirements. "Still have a lot of issues to be worked on. Making progress. A lot more to discuss," said the spokesman, Jim Manley.
Accusations
The plan, as it was first proposed last week, would broadly help relieve finance firms of their "toxic" bad debt in the form of complex financial instruments backed by sub-prime mortgages that many holders can no longer pay off.
Details of the proposed package were not immediately available but it is tipped to include restrictions on executives' pay as well as oversight requirements.
The benchmark Dow Jones index rose after Senator Dodd's initial comments, to close 198.09 points, or 1.83%, up at 11,023.26.The benchmark Dow Jones index rose after Senator Dodd's initial comments, to close 198.09 points, or 1.83%, up at 11,023.26.
Christopher Dodd on the bail-outChristopher Dodd on the bail-out
Presidential candidates Barack Obama and John McCain are in Washington for the talks. Presidential candidates Barack Obama and John McCain interrupted their campaigning to go to Washington for the talks.
The pair are due to hold a presidential campaign debate on Friday, which Mr McCain earlier said should be called off because of the pressing financial crisis.The pair are due to hold a presidential campaign debate on Friday, which Mr McCain earlier said should be called off because of the pressing financial crisis.
However, on Thursday evening Mr McCain's campaign team said the Republican senator had not yet decided whether to attend the debate in Oxford, Mississippi.However, on Thursday evening Mr McCain's campaign team said the Republican senator had not yet decided whether to attend the debate in Oxford, Mississippi.
Speaking after the White House talks, Mr Obama said he expected to "eventually" get Congressional agreement on the government's bail-out proposal, but that there was still work to do.Speaking after the White House talks, Mr Obama said he expected to "eventually" get Congressional agreement on the government's bail-out proposal, but that there was still work to do.
He blamed the financial troubles on "reckless behaviour" on Wall Street and a lack of oversight because regulators were "asleep at the switch".He blamed the financial troubles on "reckless behaviour" on Wall Street and a lack of oversight because regulators were "asleep at the switch".
Concerns
Mr McCain had earlier said he was suspending his election campaigning to help deal with the financial crisis.
His move raised criticisms of political posturing.
"The concern that I have... is that when you start injecting presidential politics into delicate negotiations, then you can actually create more problems rather than less," Mr Obama told a news conference.
The bail-out has been under scrutiny with politicians on both sides nervous about the deal being rushed through too quickly.The bail-out has been under scrutiny with politicians on both sides nervous about the deal being rushed through too quickly.
Of particular concern has been the issue of pay for the bosses of the firms in question, as well as concerns over the cost of the plan to the US taxpayer.Of particular concern has been the issue of pay for the bosses of the firms in question, as well as concerns over the cost of the plan to the US taxpayer.
But both US Federal Reserve head Ben Bernanke and Mr Bush have warned that the lack of a deal would cause a significant set-back to the economy as a whole.But both US Federal Reserve head Ben Bernanke and Mr Bush have warned that the lack of a deal would cause a significant set-back to the economy as a whole.