'We are going to get a package passed,' says Bush of bailout
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US President George W. Bush said talks were continuing with Congress on the bailout plan. Despite disagreements over aspects of the plan, "we are going to get a package passed," he said.
US President George W. Bush said Friday that negotiations were continuing on a massive rescue package for the US financial sector.
Bush acknowledged “disagreements over aspects of the rescue plan” but said there was a consensus that “something substantial must be done".
"We are going to get a package passed," he said in a brief statement.
Bush’s statement was echoed by Senate Democratic Majority Leader Harry Reid, who said he was confident that Congress would close the deal before markets open on Monday.
Asked at a press conference if Congress could complete the legislation within that time frame, Reid replied: "There's no reason we can't do that."
Congress defies White House over bailout plan
The Bush administration is locked in a battle with the US Congress over the controversial plan proposed by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. Under the plan, the US government would buy up bad debt from US financial institutions, allowing them to remain solvent and head off further market turmoil.
Lawmakers have questioned the cost of the program, estimated at $700 billion, how the government would pay for it and whether US taxpayers should pay for the banks’ mistakes.
At the core of the disagreement lies “a revolt from the right-wing base of the Republican party”, explains FRANCE 24’s Jean-Bernard Cadier. “They won’t accept the plan for ideological reasons, because they are against big government interventions.”
Although Democrats control Congress, they are hesitant to pass the plan without Republican support because of the risk of leaving their party politically exposed in an election season.
With negotiations in Washington deteriorating into clashes between Republicans and Democrats, US stocks were losing ground at Wall Street's opening Friday, following losses in Asia and Europe.
In Europe, stock exchanges fell sharply, with the London FTSE 100 index shedding 2.09% to close at 5,088.47 points and the Paris CAC 40 losing 1.50% to finish at 4,163.38.
Lending between banks remains sluggish and confidence low. The US dollar weakened against the yen and Swiss franc, two currencies associated with stability.
"The markets are just caught like a deer in the headlights, watching Washington, trying to figure out what the next step is," Boris Schlossberg, director of currency research at GFT Forex in New York, told Reuters.
But it’s not just Wall Street that’s nervous. In Europe, Jean-Claude Juncker, president of the Eurogroup of euro-zone finance ministers, also expressed impatience at the US Congress’s qualms on Friday.
"I would appreciate it if the American executive and legislators would approve a solid package as quickly as possible," Juncker said. “When I look at financial and stock markets, exchange rates and global confidence indicators, the Americans’ hesitation over their intentions deepens uncertainty.”