New Compromise Close on Bailout Bill

Plan would include optional insurance-based protection
By Matt Cantor,  Newser User
Posted Sep 27, 2008 7:56 AM CDT
Protesters march outside of the U.S Treasury building in protest of the proposed Wall Street bailouts, Friday Sept. 26, 2008, in Washington.    (AP Photo/Jacquelyn Martin)
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(Newser) – Washington is nearing a new compromise on a Wall Street bailout plan, the Wall Street Journal reports, this one aiming to reel in House Republicans who rebelled Thursday against the bill that had been hammered out by congressional negotiators. The new plan would incorporate the group's alternative model—using an insurance pool rather than tax money to cover losses on bad assets—as an option within the White House’s original $700-billion plan.

Treasury officials had earlier told the GOP lawmakers that the insurance strategy would be insufficient to clear enough bad assets from bank balance sheets. But attaching it to the bill as an option would give Treasury freedom to ignore it, while its backers would be able to claim sway over the bill, the Journal notes.