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UPDATE 2-US Democrats claim Wall St. bailout breakthrough

(Updates with details, quotes)

WASHINGTON, Sept 24 (Reuters) - Democratic Rep. Barney Frank said on Wednesday Democrats had reached an agreement to stem one of the worst U.S. financial disasters in decades, and that there would be enough votes to pass the measure and send it to President George W. Bush to sign into law.

“We now have between House and Senate Democrats an agreement on what we think should be in the bill, and we have a meeting scheduled at 10 a.m. tomorrow to meet with the Republicans,” said Frank, chairman of the House of Representatives Financial Services Committee.

Proponents of a rescue plan have expressed hope that a bill could be delivered to Bush within days.

While the Bush administration had asked Congress for $700 billion for an unprecedented Wall Street bailout, Frank said that amount might not be delivered all at once.

“One tranche doesn’t work,” he said, adding that “safeguards” were needed.

Frank said there would be tough congressional oversight of as well as limits on compensation packages for executives of companies that receive federal relief.

The Massachusetts senator said a limited number of details still had to be resolved, but thought it could be done quickly. These matters involved bankruptcy protections for families on the verge of losing their homes and giving the government a return on its money if the company being helped prospers.

Frank took a dig at Republican presidential nominee John McCain, who interrupted his campaign to return to Washington on Thursday to help work on a Wall Street bailout.

“All of sudden, now that we are on the verge of making a deal, John McCain here drops himself in to help us make a deal, Frank said.

He expressed fear that McCain, a U.S. senator from Arizona who has spent much of the year away from the Capitol campaigning, could end up slowing down work on the bill.

The Massachusetts Democrat noted that a meeting on Capitol Hill on Thursday will be interrupted for a “photo op” at the White House with congressional Democrats and Republicans as well as Bush.

“We’re trying to rescue the economy, not the McCain campaign,” Frank said.

“Earlier today it became clear to me we would get the votes to pass this bill,” Frank told CNBC in an earlier interview. He said it could take a few days to craft final legislation.

Frank spoke shortly after Bush delivered a nationally televised address in which he warned that the United States was in the midst of a financial crisis that could push the economy into a long-term recession if the government did not act.

Frank said he was pleased that the president spoke after calls by Democrats in Congress that he explain to the nation what was at stake. Democrats blamed the crisis largely on the failure of Bush to adequately regulate the financial industry.

Frank said that lawmakers writing the legislation have kept the Bush administration informed of what they intend to do.

“We know very well what Treasury and the Federal Reserve think would make this unworkable. I do not think we will have anything in here that they think would make it unworkable,” Frank said.

The issue of government controls on compensation for executives of corporations that participate in the bailout had ignited a firestorm, with Americans complaining to their representatives in Congress that these corporate chiefs shouldn’t be rewarded for failure.

“On the executive compensation thing, it went to the core of their (the Bush administration’s) being,” said Frank. “It was like asking the chief rabbi of Jerusalem to eat bacon on Yom Kippur. It was the most unthinkable thing they could think of.” (Reporting by Richard Cowan and Thomas Ferraro; Editing by Doina Chiacu)