Lawmakers Reach Accord On Huge Financial Rescue

"We believe that the taxpayer should not be left holding the bag at the end of the day, and we've proposed a way to address that," said Rep. Chris Van Hollen (D-Md.), a member of Pelosi's leadership team.

Paulson and some Republican lawmakers were said to be cool to the idea, though House Republicans also have expressed serious concerns about the cost of the program and have suggested other ideas for limiting taxpayer exposure. A House GOP plan that would allow Treasury to create a program of government insurance for some mortgages was also under discussion.

Rep. Roy Blunt (R-Ohio), who represented House Republicans, the most reluctant group to support the plan, did not commit fully to it but said he was pleased with the progress. "I look forward to what we're going to see on paper and presenting these ideas to my colleagues and getting their reaction," he said.

Democrats and Republicans from both chambers meeting with Paulson and other administration officials were also working to forge a compromise on a variety of other outstanding issues, including how quickly the government should make money available for the program and whether participating firms should be required to limit executive pay.

Even staunch opponents of the emerging plan said they expected it to pass.

Democrats said there were no outstanding issues remaining, but the negotiators just wanted to review the final words on paper today. "It's really a question of seeing what we believe we've agreed to," said Sen. Christopher J. Dodd (D-Conn.).

Yesterday's negotiations, which began shortly after 3 p.m., were at times tense and confusing, according to participants. At one point, according to Sen. Kent Conrad (D-N.D.), a senator sought advice from investor Warren E. Buffett, one of the world's richest men and a director of The Washington Post Co.

For nearly three hours in the afternoon, Conrad and other lawmakers met with Paulson around a massive table in Pelosi's conference room under an ornate portrait of Abraham Lincoln. Among lawmakers, Democrats outnumbered Republicans nine to two, an imbalance that so irritated Paulson that he called and complained to Senate Majority Leader Harry M. Reid (D-Nev.), according to three GOP sources familiar with the call.

Reid told Paulson he would not pull any of his colleagues out of the meeting. A Reid spokesman, Jim Manley, said: "If the secretary doesn't like it, that's just too bad, because he is going to need the help of each and every one of them to sell the president's plan to the Democratic caucus and the American people."

The focus on limiting taxpayer exposure may help rally support in Congress, where lawmakers have been reluctant to back the hugely expensive and unpopular bailout measure less than six weeks from the November election. But it could unnerve Wall Street, where investors are seeking the largest possible program with the fewest strings attached. They also hope lawmakers approve it before tomorrow's opening bell.

In his public testimony and private remarks, Paulson has repeatedly emphasized the need to spend $700 billion to soothe nervous markets. At that price, the government's upfront investment in the rescue package would be more expensive than the current cost of the Iraq war, which stands at about $650 billion, according to the Congressional Research Service.

But the White House and politicians on Capitol Hill have said that the government could earn back much of its money, or even turn a profit.