Senate Democrats are proposing to add government help for homeowners and limits on executive compensation to legislation providing a $700 billion financial system bailout.
A draft of the plan obtained Monday by The Associated Press shows that Senate Banking Committee Chairman Chris Dodd, D-Conn., also wants the government to get a stake in the companies helped by the unprecedented rescue.
The measure would give the government the power it has requested to buy up bad mortgage-related assets that have been dragging down financial companies. But it would end the program at the end of next year, instead of creating the two-year initiative that the Bush administration has sought.
It also would add layers of congressional oversight, including an emergency board to keep an eye on the program with two House and Senate appointees.
Congressional aides said the House could act on a bailout bill as early as Wednesday. President Bush earlier Monday issued a statement saying "the whole world is watching" how the U.S. government moves on the legislation that has come in response to business turmoil that has roiled markets at home and abroad.
"Obviously, there will be differences over some details, and we will have to work through them. That is an understandable part of the policy making process," Bush said.
But he also said "it would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan."
The proposal that Dodd has sent to Treasury Secretary Henry Paulson would let judges modify the mortgages of homeowners in bankruptcy to allow them to keep their homes.
It also would require that the government come up with "a systematic approach for preventing foreclosure" on the mortgages it acquires as part of the bailout. That would include the home loans held by Fannie Mae and Freddie Mac, the troubled mortgage giants now under the control of a government regulator.
Asked about Democrats' demands, Treasury spokeswoman Brookly McLaughlin said, "There are lots of issues but the discussions we are having are good.”