Pelosi says bailout plan has to pass

WASHINGTON Fri Sep 26, 2008 8:55am EDT

House Speaker Nancy Pelosi (D-CA) listens to a question during a weekly press conference in the U.S. Capitol in Washington, September 25, 2008. REUTERS/Mitch Dumke

House Speaker Nancy Pelosi (D-CA) listens to a question during a weekly press conference in the U.S. Capitol in Washington, September 25, 2008.

Credit: Reuters/Mitch Dumke

WASHINGTON (Reuters) - House Speaker Nancy Pelosi said on Friday a plan to rescue U.S. financial institutions "has to happen," but final agreement is up to conservative Republicans who revolted against the plan being negotiated between Congress and the Treasury Department.

"It will happen because it has to happen," Pelosi, a California Democrat, said in an interview with ABC's "Good Morning America." "I would hope that we could come to agreement in the next 24 hours."

But she added that a deal would be up to House Republicans who balked at the $700 billion package being negotiated by congressional leaders and Treasury Secretary Henry Paulson and who have given no sign that they will support it.

Pelosi and her fellow Democrats have said that President George W. Bush has to deliver a large number of Republican votes for the politically unpopular bailout to pass Congress.

Lawmakers are expected to continue negotiations on Friday.

The White House said the U.S. financial system is under stress and a bailout deal is needed.

"Clearly our financial system is under real stress and we need to get final legislation," said White House spokesman Tony Fratto. "The administration is continuing to work with Congress to get an agreement."

Pressure is mounting on lawmakers to move swiftly on a package after a contentious meeting at the White House on Thursday that also involved presidential candidates Republican John McCain and Democrat Barack Obama.

On Wall Street, stocks appear to be headed for a lower opening amid the turmoil over the package and news of the largest bank failure in U.S. history.

Shortly after the White House meeting, U.S. authorities announced they were shutting Washington Mutual Inc and selling its assets to JPMorgan Chase.

Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee and an opponent of the bailout plan, said on Friday the plan would have to change before congressional Republicans will support it.

Asked in an interview on CBS' "The Early Show" whether it would be approved by the end of the weekend, Shelby replied: "We could but I think we'll have to change the structure some."

In a later interview with CNBC, Shelby said, "this is not going to work."

The Democratic chairman of the House Financial Services Committee, Rep. Barney Frank, countered that the passage would depend on Republicans reaching agreement among themselves.

"It depends on the House Republicans dropping this revolt against the president and cooperating in trying to amend the plan," Frank said.

(Writing by Donna Smith; additional reporting by Jeremy Pelofsky; editing by Eric Beech)