WASHINGTON — A Republican revolt stalled urgent efforts to lash together a national economic rescue plan Thursday, a chaotic turnaround on a day that had seemed headed for a success that President Bush, both political parties and their presidential candidates could celebrate at an extraordinary White House meeting.
Weary congressional negotiators worked into the night, joined by Treasury Secretary Henry Paulson in an effort to revive or rework the $700 billion proposal that Bush said must be quickly approved by Congress to stave off potentially "a long and deep recession."
They gave up after 10 p.m. EDT, more than an hour after the lone House Republican involved, Rep. Spencer Bachus of Alabama, left the room. Democrats blamed the House Republicans for the apparent stalemate. Those conservatives have complained that the plan would be too costly for taxpayers and would be an unacceptable federal intrusion into private business.
Talks were to resume Friday morning on the effort to bail out failing financial institutions and restart the flow of credit that has begun to starve the national economy.
The day's White House summit, bringing together Bush, presidential rivals John McCain and Barack Obama, and top congressional leaders, had been aimed at showing unity in resolving a national financial crisis, but it broke up with conflicts in plain view.
After six days of intensive talks on the unprecedented package proposed by the Bush administration, with Wall Street tottering and presidential politics intruding six weeks before the election, there was more confusion than clarity.
Late Thursday, McCain's campaign issued a statement saying, "the plan that has been put forth by the administration does not enjoy the confidence of the American people as it will not protect the taxpayers and will sacrifice Main Street in favor of Wall Street."
Key Democrats and Republicans had announced they had the outlines of a tentative agreement at midday, just hours before the White House meeting. That accord would have given the Bush administration just a fraction of the money it wanted up front, subjecting half the $700 billion total to a congressional veto.
But conservatives were still in revolt, balking at the price tag of the proposal and the hand of government that it would place on private markets.
Inside the White House meeting, House Republican leader John Boehner expressed misgivings about the emerging plan and McCain would not commit to supporting it, said people from both parties who were briefed on the exchange. They spoke on condition of anonymity because the session was private.
McCain's campaign statement described the meeting as "a contentious shouting match that did not seek to craft a bipartisan solution."
Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee, emerged from the session to say the announced agreement "is obviously no agreement."
One group of House GOP lawmakers circulated an alternative that would put much less focus on a government takeover of failing institutions' sour assets. This proposal would have the government provide insurance to companies that agree to hold frozen assets, rather than have the U.S. purchase the assets.
Rep Eric Cantor, R-Va., said the idea would be to remove the burden of the bailout from taxpayers and place it, over time, on Wall Street instead. The price tag of the administration's plan to bail out tottering financial institutions and the federal intrusion into private business matters have been major sticking points for many Republican lawmakers.
"I'm feeling somewhat puzzled at this point," said Rep. Barney Frank, D-Mass., the Financial Services Committee chairman who has been leading negotiations with Paulson. "We're closer to a deal among the House Democrats, Senate Democrats, Senate Republicans and the administration. ... We seem further away with the House Republicans."
"Sen. McCain and the president between them ought to be able to get House Republicans back to the table," said Frank.