Frank: Bailout deal could be struck by Sunday

House Democrats’ chief negotiator on the Wall Street bailout package said Friday evening that he believes Congress can reach a deal by Sunday, before the stock market opens a day later.

“I’m confident we’ll have an agreement that people can understand by Sunday,” House Financial Services Committee Chairman Barney Frank (D-Mass.) told reporters at a news conference.

{mosads}Speaker Nancy Pelosi (D-Calif.) said the House plans to work through the weekend and “we will not leave until we have legislation that will be signed by the president.”

Pelosi and Frank said that progress is being made after it stalled Thursday amid a revolt by House Republicans against the Bush administration’s bailout proposal. That coincided with the arrival of Republican presidential candidate Sen. John McCain (Ariz.), and Frank couldn’t resist the urge to fire a partisan salvo on Friday.

“Now that Sen. McCain is safely in Mississippi, we can get back to work,” Frank said. After hesitating, McCain announced Friday morning he would attend tonight’s debate in Oxford, Miss.

The Bush administration has proposed giving the Treasury Department the authority to buy $700 billion worth of toxic debt from Wall Street firms. Treasury Secretary Henry Paulson had been negotiating details of that plan with congressional Democrats and Senate Republicans until Thursday.

That’s when House Republicans offered a new proposal, saying they could never get support from their membership for the Paulson plan. Their plan would allow the federal government to sell insurance to Wall Street firms to cover the bad debt.

In their appearance before the cameras, Pelosi and Frank continued to hint at the outlines of a deal that’s already been floated by both presidential candidates. It would involve adding the House Republican insurance plan to Paulson’s purchase plan, giving Treasury the authority to buy the debt and insure the debt.

“Adding insurance is an option,” Frank said.

Pelosi agreed that the Republican plan could be added in, though she stressed, only “as long as the proposals do not interfere with the success of the plan.”

Pelosi also continued to stress that she will not bring the bailout plan to the floor and try to pass it with only Democratic votes.

“We don’t have the votes to do that,” Pelosi said. “This proposal is very unpopular among the American people in terms of their first look at it.”