Washington Tries to Wrap Up the Bailout

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asp?symbol=GS'>GS) alumnus—studying which tranches of toxic assets should be bought up first, and which institutions need the most help. This means Treasury could be ready to start buying assets within a month of whenever the President signs a final bill, he says.

The most optimistic timetables still suggest passage by midweek at the earliest. Even if the House were to pass the measure by Monday, one analyst noted, the Senate would be unlikely to take it up until Wednesday, after Tuesday's Jewish holiday of Rosh Hashanah.

Some Republicans Remain Opposed

Echoing more than a week of warnings from Administration officials, Senator Judd Gregg (R-N.H.), one of a handful of Republicans who negotiated the deal with the Democrats and Paulson, urged fellow lawmakers to support the measure. "The downside of not doing this is such a catastrophe for our nation that we don't even want to contemplate it," Gregg said. "This is about Main Street, it's about America, it's about the fabric of American life."

Despite support from key lawmakers of both parties, it was clear the bill would still face substantial opposition among some Republicans, particularly those philosophically opposed to market intervention by the government.

Those fighting the bill suggested that Republican activism had improved it, but that the proposal remained, as Representative Mike Pence (R-Ind.) argued in an open letter to fellow lawmakers, "the largest corporate bailout in American history," and one that "forever changes the relationship between government and the financial sector."

Significant Bipartisan Support Claimed

"Economic freedom means the freedom to succeed and the freedom to fail," Pence wrote, noting that he would oppose the bill. "The decision to give the federal government the ability to nationalize almost every bad mortgage in America interrupts this basic truth of our free market economy."

Still, analysts said it looked likely that House and Senate leaders in both parties had corralled enough support from Republicans to ensure not only passage, but significant bipartisan support. Democratic leaders had made clear that they have little appetite for passing a bill—initially proposed by the Bush Administration and derided by much of the public as a Wall Street bailout—that lacked substantial GOP support.

The bill that took shape over the weekend toned down some provisions sought by Democrats in last week's drafts, particularly those opposed by the financial services industry and the broader corporate community.

Here are some of the details of the legislation as of Sunday night:

• EXECUTIVE PAY: While the bill continues to include measures to rein in executive pay, the final measures are less harsh than those many Democrats have been advocating. Some of the restrictions—including a 20% excise tax on "golden parachute" severance agreements and limits on tax deductions for top executives' pay over $500,000 a year—apply only to companies selling $300 million or more in assets to the Treasury in the reverse auctions it is expected to hold; other measures include "claw-backs" of executive bonuses based on what turn out to be "materially inaccurate" financial results. Treasury officials said such measures would apply only to the top five executives at any participating firm on contracts signed in the future. Any severance clauses or golden parachutes included in executives' current contracts would continue to be valid; Treasury officials say they will not abrogate those contracts. Measures opening corporate proxy filings to dissenting shareholders also appeared to be dead.

"It looks like what they did was react to a lot of industry's negative comments [about] executive compensation and corporate governance," said Frank Lawatsch Jr., a partner with Day Pitney in New York. "You're really only going to be picking up big, big institutions.