US House Minority Leader John Boehner (R-OH) (C) talks with reporters about progress with congressional negotiators working on a bailout package for the current financial and banking crisis, at the US Capitol in Washington, September 27, 2008. (Xinhua/Reuters Photo) Photo Gallery>>>

    WASHINGTON, Sept. 28 (Xinhua) -- U.S. lawmakers at the Congress reached a tentative deal Sunday on a 700-billion U.S. dollar bailout plan designed to buy up bad loans from financial institutions hit by failed mortgages.

    House of Representatives Speaker Nancy Pelosi said the lawmakers had made "great progress" on the bill. "We have to get it committed to paper so we can formally agree," she said. A formal announcement of the deal is expected late Sunday.

    "We've been working very hard on this," U.S. Treasury Secretary Henry Paulson told reporters on early Sunday morning.

    "We've made great progress toward a deal, which will work and will be effective in the marketplace, and... effective for all Americans," he said.

    Paulson presented the original bailout plan more than a week ago, which foresees use of tax dollars to buy up bad debt from financial institutions staggered by the sub-prime mortgage crisis.

    However, the plan was rejected by some Republicans who wanted an alternative plan under which the government would provide insurance to companies that agree to holdfrozen assets. The alternative plan would cost taxpayers less, the Republicans said.

    Media reports said the House and the Senate could vote on the bill on Sunday and Monday respectively.

Demonstrators protest the U.S. Congress' proposed $700 billion bailout of the financial industry in New York's Times Square September 27, 2008. The U.S. Congress embarked on a weekend mission to strike a deal on a proposed $700 billion bailout of the financial industry before stock markets open on Monday in an attempt to end the greatest financial crisis since the Great Depression. (Xinhua/Reuters Photo) Photo Gallery>>>

Some Republicans

    A group of House Republicans, who earlier resisted efforts to quickly pass a bailout package, on Saturday afternoon said they were about to rejoin the talks but would not be held to any "artificial timelines."

    "We're not moving on any kind of artificial timeline. We're moving toward the very best solution in the shortest period of time we can get to the very best solution," said Rep. Roy Blunt of Missouri, the chief negotiator for House Republicans.(No breakthrough at White House meeting on bailout plan; Analysis: High-stake politics of U.S. bailout plan)

Protesters

    In New York, dozens of noisy protesters marched from Times Square hoisting a banner that read "No Money for Wall Street, No Money for War, Bailout the Workers and the Poor."

    "The feeling is of outrage against this bailout because the average person has not been bailed out of anything," said activist Sara Flounders, 60.(Protesters rally in New York against bailout)

Democrats

    Democrats said they were considering a proposal to institute a fee on financial firms if taxpayers lost money from the government's asset purchases.

    Democrats have pushed for the money to be made available in tranches in order to create a legislative check on the program.

Henry Paulson

    Treasury Secretary Henry Paulson, by contrast, had wanted to have the full $700 billion at his disposal from the start, arguing any package had to be big enough to instill confidence in shaky markets.

    Paulson first announced the bailout plan on Sept. 18. One principal aim is to unfreeze the credit markets - short-term lending among banks and corporations - by giving Treasury authority to purchase bad assets from banks and other financial institutions.(Paulson: Decisive action needed to address root cause of financial crisis)

George W. Bush 

    U.S. President George W. Bush on Wednesday urged Congress to approve the 700-billion-dollarbailout plan, saying a failure could lead the United States into "a long and painful recession."

    "We are in the midst of a serious financial crisis and the federal government is responding with decisive action," Bush said in a televised national address.
 
    Bush also acknowledged the public anger over the bailout package. "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," Bush said. (Bush urges Congress to approve the bailout plan, warns of recession)

Barack Obama

    Democratic presidential nominee Barack Obama accused McCain on Saturday of playing politics with the financial crisis, while his Republican rival tried to show leadership by returning to Washington, where an aide said he was working the phones behind the scenes.(Wall Street turmoil changes dynamics of U.S. presidential race; Obama, McCain focus on economy, foreign policy in first debate )

    Obama gave a nod last Friday for the Republican administration's response to the financial downturn.

    "I support the effort of Secretary Paulson and Federal Reserve Chairman Bernanke to work in a bipartisan spirit with the Congressional leadership to find a systemic solution to our deepening crisis," he said in a statement. (Obama nods U.S. government's response to financial turmoil)

John McCain

    Republican presidential candidates John McCain announced Wednesday that he was suspending his campaign and heading to Washington to help forge a pact on the bailout plan. However, the move proved to be a blunder inspired by misjudgment.

    John McCain said on last Friday that the federal government needs to limit bailouts to failing companies.

    Speaking to supporters in Green Bay, Wis., the senator from Arizona also called for reform on how the government handles and oversees financial markets.(McCain cautions on U.S. gov't bailout plan )

Urgent background

    In the past two weeks, the banking world and Wall Street have been reordered by a wave of collapses and mergers.

    Central banks have been forced to pump liquidity into the markets to try to prevent them from seizing up and bringing the economy to a halt.

    Regulators seized savings and loan Washington Mutual Inc on Thursday in the biggest bank failure in U.S. history, selling its assets to JPMorgan Chase & Co. In a reflection of the latest Wall Street shakeout, Washington Mutual filed for bankruptcy in a Delaware court on Saturday.(Business as usual after largest-ever bank collapse in U.S.; JPMorgan buys Washington Mutual's assets)

    Meanwhile, published reports said Wachovia Corp, the sixth-largest U.S. bank, began merger talks with potential partners after a 27-percent drop in its shares on Friday.