WASHINGTON — Congressional leaders said they had reached a deal in principle Thursday on a proposal to bail out the financial markets, but they provided no details, and it was unclear whether Republicans would sign on.
Top leaders of both banking committees and representatives from both political parties emerged after three hours of negotiation to say they had worked out a final deal on a bill to create a facility to buy troubled loans.
But Rep. Spencer Bachus, the top Republican on the House Financial Services Committee, muddied the waters later in the afternoon by saying: "There was progress on many issues, but no agreement other than to continue discussions."
That was not the impression the Alabama Republican gave to reporters after the negotiations, in which he participated, when he said he had worked closely with Sen. Jack Reed, D-R.I., to add provisions to the bill that would protect taxpayers.
House Minority Leader John Boehner, R-Ohio, later supported Rep. Bachus, saying, "House Republicans have not agreed to any plan at this point."
The turnabout angered House Financial Services Committee Chairman Barney Frank, a critical leader in the negotiations. The Massachusetts Democrat blamed presidential politics for getting in the way.
"To my dismay and disappointment, subsequently, after … [Rep. Bachus] left the meeting, he raised a couple of new issues that he didn't raise in the meeting," Rep. Frank said in an interview on CNBC. "Apparently he said it was [Sen. John] McCain's idea, and this had been my fear — that McCain, in the desperation to revive his political campaign, would slow down our ability to get anywhere."
The election has overshadowed some of what lawmakers are trying to accomplish. The two major presidential candidates were scheduled to meet Thursday afternoon at the White House to help further negotiations. Rep. Frank was adamant that the meeting was a "photo op" and was getting in the way of finalizing the bill.
After the White House meeting, Sen. Richard Shelby, the top Republican on the Banking Committee, said no deal had been cut.
"I don't believe we have an agreement," he said. "We have not gotten an agreement. There is still a lot of different opinions."
The Alabama Republican unveiled his alternative to the Treasury Department's plan, which he has repeatedly criticized.
"Proponents of the Paulson plan are telling the American people we can solve this problem with a single bill. I don't believe that is credible," Sen. Shelby said. "We have a number of interrelated problems that need to be addressed in order of their significance. First, and most urgent, is liquidity. Then we must address the solvency of our financial institutions and declining home values, not to mention our entire regulatory structure."
Speaking for the lawmakers who said they had reached an agreement, Sen. Charles Schumer, D-N.Y., told CNBC that Congress was not prepared to give $700 billion up front. Instead, Sen. Schumer said, lawmakers would give $250 billion immediately and another $100 billion if the president certifies it is necessary.
The facility would have access to an additional $350 billion in May, he said. Sen. Schumer confirmed that the bill would include a provision to let the government take equity stakes in the companies it assists.
Sen. Robert Bennett, R-Utah, who has been the lead Republican negotiating the bill on the Senate side, agreed. "There was never any way you could pay $700 billion all at once," he said.
Sen. Bennett told reporters Thursday that he felt the plan was sufficient to stabilize the markets.
"The percentage of the mortgage market that has gone bad is about 5%, and $700 billion is about 5% of it," Sen. Bennett said. "You are never confident of anything in these circumstances; you do the best you can. I think $700 billion is probably the right number."
Sen. Bennett said he believed Senate Republicans could support the bill.
"I now expect we will indeed have a plan that can pass the House, pass the Senate be signed by the president and bring a sense of certainty to this crisis that is still reeling in the markets," he said.