'Significant progress' reported in financial bailout talks

Some U.S. senators are reporting progress in talks on a $700-billion US bailout plan to alleviate the crisis in the country's financial sector.

The Senate's Democratic leader, Harry Reid, said on Saturday that congressional aides had worked late into the night and he was hoping for an agreement in principle by late Sunday.

"It is still a long way from completing it but we've made significant progress," he said.

Two Republican senators, Mitch McConnell and Judd Gregg, also reported making progress in pushing through the economic package, aimed at keeping the domestic banking industry afloat.

A meeting was scheduled Saturday night between congressional Republicans and Democrats, and Gregg said they won't leave the table until there's an agreement.

In another sign of progress, the House rules committee began drafting guidelines for a debate and vote that could take place as early as Sunday, which would send the bill to the Senate for final passage Monday. The House is scheduled to convene at 1 p.m. ET Sunday.

The bailout is intended to rescue bankers from the bad loans that threaten to derail the U.S. economy and plunge the country into a prolonged economic slump.

Reid said negotiators were under pressure to resolve about 15 outstanding issues before the next round of overseas trading begins.

"If we could do it by 6 o'clock tomorrow that would be really important because that's when the Asian markets open," Reid said.

Bush addresses nation

President George W. Bush used his weekly radio address to appeal to legislators from both parties to work together on "an issue that transcends partisanship." He said he was confident "we will pass a bill to protect the financial security of every American very soon."

The president said he was aware that many of his radio listeners were upset. "You make sacrifices every day to meet your mortgage payments and keep up with your bills. When the government asks you to pay for mistakes on Wall Street, it does not seem fair," Bush said.

"And if it were possible to let every irresponsible firm on Wall Street fail without affecting you and your family, I would do it. But that is not possible," he added.

The legislation the White House is promoting would allow the government to buy bad mortgages and other sour assets held by investors, most of them financial companies.

Distressed securities

Many House conservatives say they are against such heavy federal intervention. Under the Republican plan, the government would insure the distressed securities rather than buy them.

 "There are a lot of issues still on the table," House Minority Leader John Boehner said midday. "We should not be bailing out Wall Street on the backs of American taxpayers."

Democrats and administration officials said they could support the Republican plan to insure the securities, but only as an option and not as a replacement to the strategy of buying them out.

"There may be a way in which that could be accommodated as part of the toolbox" available to the Treasury Department, said Republican Senator John Thune.

"As a practical matter, that can't be the engine that drives this bill," he said.