For the latest update on this article, click here.
WASHINGTON (AP) -- Key supporters of a Wall Street bailout package prodded lawmakers to approve the plan hours ahead of a difficult House vote on Monday, with President Bush saying it is needed to "keep the crisis in our financial system from spreading throughout our economy."
"Every member of Congress and every American should keep in mind that a vote for this bill is a vote to prevent economic damage to you and your community," said Bush, fully aware that congressional passage of the $700 billion compromise legislation is far from assured.
"With this strong and decisive legislation," he said, "we will help restart the flow of credit so American families can meet their daily needs and American businesses can make purchases, ship goods and meet their payrolls."
The package by cleared a key procedural hurdle on the House floor Monday morning with a 220-198 vote to move it to three hours of general debate and a final vote, likely by midday or early afternoon.
As debate opened on the package, Rep. Barney Frank, D-Mass., one of its architects, called the measure a "tough vote," but a necessary one to stave off a financial meltdown.
"Many of us feel that the national interest requires us to do something which is, in many ways, unpopular," said Frank, the Financial Services Committee chairman. "It is hard to get political credit for avoiding something that has not yet happened."
Two leading players in the negotiations also spoke early Monday, taking to television news shows to lobby for approval of a package deeply unpopular with a public angry that taxpayer money will save Wall Street firms from heavy risk-taking. Thousands of angry phone calls, e-mails and letters have poured into Capitol Hill from constituents. Their message essentially: it's a hold-your-nose-and-vote matter.
Sen. Chris Dodd, D-Conn., said that failure to act would spread the contagion of frozen credit markets even further. "This is not just about Wall Street," said the Banking Committee chairman.
Sen. Judd Gregg, R-N.H., told The Associated Press: "It's one of those situations where if it passes and works, people will never know how close we were to the brink."
Still, both men said the necessity of such massive government action is a sad day for the nation. Asked if the legislation, slated for a vote in the House later Monday and a Senate vote as early as Wednesday, would pass, Dodd said only: "We hope so."
These players were speaking not just to rank-and-file lawmakers to whom the spotlight now turns in this contentious, dramatic debate, but to U.S. and global markets which have displayed nervousness about Washington's determination to act.
Investors worldwide and in early trading in the United States continued to show doubt about whether the bill would go through, much less go a long way toward curing the systemic problems that have unnerved financial markets across the globe for weeks.
There was a further sign of general economic deterioration Monday as the Commerce Department reported that consumer spending was unchanged in August -- even worse than the small 0.2 percent gain that economists had anticipated. It was the weakest showing since spending was also flat in February.
Federal Reserve Chairman Ben Bernanke, in a statement Monday, said he welcomed agreement on a compromise bill.
"This legislation should help to restore the flow of credit to households and businesses that is essential for economic growth and job creation, while at the same time affording strong and necessary protections for taxpayers," Bernanke said, calling for swift passage.
Bush said he "fully understands" the bailout bill is a difficult vote for lawmakers, and after his statement on the South Lawn he, and Vice President Dick Cheney, took to the phones to corral individual members of Congress.
The president argued that jittery U.S. taxpayers will benefit from a number of safeguards that lawmakers wrote into the pending legislation, including checks and balances on the operation of the program, curbs on "golden parachutes" for top executives of firms getting help, and assurances that taxpayers would ultimately be reimbursed by the companies for any losses. But the government would have broad discretion to decide how to implement both. The legislation also requires that the government take ownership stakes in companies that receive federal infusions, so it could share a piece of potential future profits.
Bush also said the ultimate cost of the bailout will be much less than the $700 billion authorized in the bill. The sour assets -- mostly mortgage-backed securities -- that the program allows the government to take off the books of struggling financial institutions will eventually be sold, perhaps even at a profit.
Still, Bush hinted that this may not be the last intervention required.
"Even with the important steps we're taking to address the current crisis, we will continue to face serious challenges," he said.
Treasury Secretary Henry Paulson sought the unprecedented amount of money with little supervision.
Instead, the bill lets Congress block half the money and force the president to jump through some hoops before using it all. The government could get at $250 billion immediately, $100 billion more if the president certified it was necessary, and the last $350 billion with a separate certification -- and subject to a congressional resolution of disapproval. Still, the resolution could be vetoed by the president, meaning it would take extra-large congressional majorities to stop it.
Banks, credit unions, securities brokers and dealers, and insurance companies, among others, could get the help as long as they had "significant operations" in the United States. Originally designed to help companies get rotten mortgage-related investments off their balance sheets, the legislation would allow the government to buy up any kind of asset top economic officials think is necessary to promote market stability.
The final 110-page bill was released Sunday evening after a final weekend of intense negotiating, and Republicans and Democrats huddled for hours in private meetings Sunday night to learn its details and voice their concerns. Many said they left uncertain of how they would vote.
Lawmakers in both parties who are facing re-election are particularly nervous about embracing such a costly plan proposed by a deeply unpopular president that would benefit perhaps the most publicly detested of all: companies that got rich off bad bets.