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White House summit ends with no deal

Markets brace after House Republicans hold up agreement

By Jon Ward and David R. Sands, THE WASHINGTON TIMES | Friday, September 26, 2008

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With the two men who want to succeed him sitting close by, President Bush on Thursday convened a historic, high-stakes summit to sell his $700 billion Wall Street bailout package, but the meeting produced fresh acrimony without clinching a deal on the rescue plan.

Congressional leaders negotiated into the night with Treasury Secretary Henry M. Paulson Jr. on Capitol Hill hoping most especially to overcome objections by conservative House Republicans about the size and scope of the package.

"If we get support from House Republicans, this could all be done in a couple of days," Senate Majority Leader Harry Reid said.

Adding urgency to the crisis, a trio of new reports showed a rapidly weakening U.S. economy. Orders for long-lasting U.S. manufactured goods and sales of new homes plunged in August while jobless claims shot up last week to their highest level in seven years, according to the government.

New-home sales fell by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales pace since January 1991. It was a substantially bigger sales decline than the 1 percent drop that economists had been expecting.

Wall Street had a generally good day on Thursday based on early reports that a deal was imminent, but investors braced for the possibility of markets opening without a bailout in place.

The stalemate over the bailout also continued to loom over the first presidential debate between Republican Sen. John McCain and Democratic rival Sen. Barack Obama, both of whom attended the summit in the White House Cabinet Room.

Mr. McCain, who suspended his campaign Wednesday to deal with the Wall Street implosion, has called for a postponement of Friday night's debate on foreign policy and national security issues, but Mr. Obama has insisted that he wants the debate to proceed.

"One of us will inherit this mess in four months," Mr. Obama said, adding that the American people should hear where he and Mr. McCain stand on the issues.

Participants in the White House meeting described a number of contentious moments, and Mr. Reid said the White House meeting had actually set the negotiations back.