Talks on U.S. Bailout Plan Break Up

A historic White House meeting yesterday that had been expected to draw a bipartisan agreement on a financial bailout plan broke up, stirring confusion.

Both Democrats and Republicans, however, said they will continue talks to reach an agreement. Some experts predict Congress would be closed later than scheduled.

U.S. President George W. Bush had a meeting with bipartisan political leaders including Democratic Party presidential candidate Barack Obama, Republican rival John McCain, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid on measures to overcome the financial crisis, but failed to reach an agreement on the proposed bailout worth 700 billion U.S. dollars.

A source familiar with McCain said the agreement discussed at the meeting was abolished and Democrats admitted that the negotiations failed.

Democrats and Republicans held negotiations at Congress early in the morning and drew the framework for the agreement, which included phasing in a rescue plan worth 700 billion dollars in the market; limiting the severance packages of CEOs to get support from the rescue plan; and giving the government the right to acquire shares of financial institutions subject to the bailout.

Expectations for the bill heightened and revived the U.S. financial market. U.S. stocks rose and the prices of U.S. Treasury bonds and gold plunged after soaring due to investors seeking safer assets.

Prior to the meeting, Bush said the United States is in a serious economic crisis. He said he hopes an agreement will come very shortly, raising expectations for an agreement on the rescue plan.

As Republicans urged the government to be more cautious in purchasing troubled assets from financial institutions, the debate finally broke up.

The New York Times quoted certain Democrats blaming Republicans as betrayed them after the meeting at the White House.

higgledy@donga.com