Politics

CHICAGO (CBS) ― Congressional negotiators are back to the drawing board after working overtime Thursday night on a bailout plan, but ultimately failing.

As CBS 2's Mike Puccinelli reports, the bailout is the talk of the town and the nation, and there is no shortage of viewpoints as to what is the right method of solving what is often called the country's worst financial crisis since the Great Depression. 

CBS 2 HEARS YOU: What are your thoughts on the government's  bailout plan? | Read Other Viewer Comments: Part 1 | Part 2 | Part 3

CBS 2 set out to take the pulse of one of Chicago's "main" streets – specifically Canal Street – on the president's plan to rescue Wall Street.

The White House summit that accompanied the negotiations in Congress brought together John McCain and Barack Obama, the two men who would be president, and the man they both hope to succeed. But there was no meeting of the minds on the bailout proposal, and Chicagoans are also divided on the issue.

"It's good and bad, but I'm not for it," said Jim Murphy of Evergreen Park. "It seems like five years in the making, and they want to rush it through in three days."

"Something needs to be done," added Arthi Narayan. "Definitely there needs to be oversight. I don't think they can give the treasury a blank check.

The bailout agreement fell apart Thursday night as Republican leaders balked at the huge taxpayer price tag and government involvement in the private sector.

Inside the session, House Republican leader John Boehner expressed misgivings about the emerging plan and McCain would not commit to supporting it, said people from both parties who were briefed on the exchange. They spoke on condition of anonymity because the session was private.

The earlier agreement by key members of Congress from both parties - but not top leaders - would have given the Bush administration just a fraction of the money it wanted up front, subjecting half the $700 billion total to a congressional veto.

On Canal Street, Chicagoans said there is plenty of blame to go around when it comes to the breakdown.

"It's obviously a political football, and who's getting kicked around, in my opinion, is the American public," said Jim Ginzkey of Bloomington.

The proposed bill, largely crafted by Democrats with only modest Republican input, would also likely have included caps on the pay of executives of firms that take federal assistance, mortgage relief for families facing foreclosure, equity stakes for taxpayers and an oversight board to hold the Treasury secretary accountable, reports CBS News correspondent Bob Orr.

Before talks collapsed, CBS News learned the bailout plan would have included an oversight board, holding Treasury Secretary Hank Paulson accountable for taxpayers money, salary caps for executives of companies unloading bad debt, equity stakes for taxpayers in firms that take the bailout and mortgage relief for families facing foreclosure.

That last point is a must, according to Andrea Frye, communications director of the National Training and Information Center in Chicago - a group that focuses on housing and banking issues.

"It seems we've come to the aid to the tune of $700 billion of Wall Street investors," Frye said. "And we'd like to see a little relief for homeowners," Frye said.

On Friday, the chairman of the House Financial Services Committee declared that an agreement depends on House Republicans "dropping this revolt against President Bush."

Rep. Barney Frank (D-Mass) said leading Democrats on Capitol Hill were shocked by the level of GOP divisiveness that surfaced at a White House meeting Thursday, not long after key congressional players declared they had the broad outlines of an agreement on a bill implementing the bailout plan.

Frank said he did not think that Democrats were going to see a substantially different proposal from the $700 billion bailout plan that the administration has been trying to sell to lawmakers and which has been the focal point of closed-door talks for days.

The Democrats have accused McCain of helping scuttle the Republican plan on Thursday in order to boost his own presidential campaign. But McCain said this was not true, and that he agrees with the plan put forth by Republican members of Congress – although not necessarily the one put forth by President Bush.

Economists and lawmakers do believe some sort of economic plan will be reached over the next several days. But what it will look like, is again, anybody's guess.

CBS 2's Dana Kozlov and Mike Puccinelli, CBS News and the Associated Press contributed to this report.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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