The Treasury's plan to spend up to $700 billion of taxpayers' money to bail out the nation's financial system was recognized as dead Wednesday as lawmakers in Congress made clear that they're going to make significant changes.
Treasury Secretary Henry Paulson, who has spent two days urging members to pass legislation quickly and cleanly, conceded Wednesday that any bill will have to have limits on executive pay at troubled firms and hinted he would accept other changes.
"The American people are angry about executive compensation and rightfully so," Paulson told the House Financial Services Committee.
His willingness to publicly agree to the pay provision was another strong sign that Congress and the administration were working toward the same goal — enactment of a major financial bailout package, and soon.
"It means we are closer," said Financial Services Committee Chairman Barney Frank, D-Mass. He predicted that House and Senate Democrats would have an agreement by Thursday to present to Republicans.
Members of Congress talked privately with administration officials throughout the day about changes to the plan. Several provisions sought by lawmakers from both parties were expected to be added, notably strong oversight of any bailout, more aid to homeowners facing foreclosure and possibly trimming back the cost of the package, at least initially.
"Over the last 24 hours, I've seen signs of greater cooperation from my colleagues in Congress," said Sen. Charles Schumer, D-N.Y., who's on the Senate Finance Committee. "Despite many of their well-founded reservations, (they) recognize the magnitude of the problems we face and the importance of getting something done."
One measure of Congress's disgust with the original Treasury plan came Wednesday when Federal Reserve Chairman Ben Bernanke and Paulson met privately with House Republicans. Afterward, Rep. Tom Davis, R-Va., said that only four members raised their hands at the end when there was a request for a show of hands for support of the original White House bailout proposal.
It remains unclear though how close Congress is to passing legislation.