Wrangle Over $700B Bailout Heats Up

Lawmakers seek pay caps, homeowner help, as doubts mount
By Rob Quinn,  Newser Staff
Posted Sep 23, 2008 6:58 AM CDT
A trader checks his phone as he works on the floor of the New York Stock Exchange last week.   (AP Photo/Richard Drew)
camera-icon View 2 more images

(Newser) – Congress and the Bush administration are edging closer to an agreement on a bailout for financial firms—but several major sticking points remain, the New York Times reports. Progress has been made on oversight for the $700-billion fund, but lawmakers are pushing for taxpayers to get an equity stake in firms they bail out, and the White House wants flexibility. Some are demanding a cap on the pay of top executives whose firms are rescued.

Others want bankruptcy judges to be granted leeway to cut homeowners' mortgage payments. Meanwhile, anger over the cost to taxpayers, doubts about the scheme's success, and pressure to speed it through Congress have injected rancor into the negotiations, as some lawmakers on both sides of the aisle see a parallel to the administration's full court press leading to the war in Iraq.