Agreement On Corporate Reform

Negotiators for the House and Senate have reached agreement on legislation to crack down on corporate fraud, a Republican official said Wednesday.

"We have an agreement," said Peggy Peterson, a spokeswoman for Rep. Mike Oxley, the Ohio Republican who chairs the House Financial Services Committee.

Rep. John LaFalce, D-N.Y., the senior Democrat on the committee, said Republicans had agreed to Democratic demands to strengthen the original House-passed bill, adding that negotiators would meet later in the day and "we will accept surrender from the Republicans."

The White House has indicated that President Bush would sign the legislation.

No details were immediately available on what provisions would be included in the final bill. But CBS News Correspondent Bob Fuss reports the quick agreement on such a tough measure reflects the political pressure to do this fast and means House Republicans surrendered for the most part their efforts to make the bill more business friendly.

Final agreement would lead to enactment of legislation before lawmakers begin a monthlong summer break.

The issue has moved with extraordinary speed through Congress in the weeks since WorldCom announced it had erroneously accounted for $3.9 billion in expenses.

Earlier Wednesday, the White House urged Congress to act quickly on the corporate fraud legislation to help "boost confidence" in hard-hit U.S. financial markets.

White House spokesman Ari Fleischer also said the U.S. economy was growing solidly and that despite Wall Street's big slide the president was sticking by his long-neglected plan to let workers invest Social Security funds in the stock market.

In his 2000 campaign, Mr. Bush proposed allowing younger workers the option of diverting part of their payroll Social Security taxes into private investments. He'sent the plan to Congress, but it's made little headway there.

Asked about the plan Wednesday, Fleischer said "nothing has changed" the president's views.

While lawmakers in both parties have said they hope to restore confidence among nervous investors, election-year politics also contributed to the rapid progress of the corporate fraud legislation.

Both parties have maneuvered for political gain, Democrats accusing Republicans of waiting far too long to crack down on corporate criminals, and the GOP responding by proposing stronger penalties for wrongdoers than even the Democratic-controlled Senate approved.

"I think we need to assure the investors and employees and employers that we're making the right moves to straighten out the system," House Minority Leader Dick Gephardt told reporters after congressional leaders met with Mr. Bush at the White House.

"We're very confident that we can complete our work," over the next 10 days, said Senate Majority Leader Tom Daschle, D-S.D.

Senate Minority Leader Trent Lott, R-Miss., predicted that the final compromise on the corporate fraud measure would include the strongest provisions of measures passed by both chambers.

And House Speaker Dennis Hastert, R-Ill., said, "The House will be in next week and the Senate concludes in two weeks. So there's a lot of legislation ... we're trying to move through."

The most sweeping revision of accounting standards, now before a House-Senate conference committee, could be on the president's desk as soon as Thursday, Rep. John Boehner, R-Ohio, said Tuesday night.

"It's moving along. We're getting there," Boehner said.

House Democrats, meanwhile, launched a drive to bring to the GOP-controlled House floor this week a measure that closely tracks the bill passed unanimously last Monday by the Democratic-led Senate.

"People have lost their pensions, their retirement, the prospects for their children's education and their children's future," said Democratic Whip Nancy Pelosi, D-Calif. "And what have the House Republicans done? In the name of corporate reform, they continue to pursue cosmetic rather than real change."

House Republicans, who pushed through accounting oversight legislation in April — before now-bankrupt WorldCom disclosed that it hid nearly $4 billion in expenses — appear to have little leverage.

"We all want something by the end of the week, but we don't want just any damn thing that happens to satisfy the next political pollster," House Majority Leader Dick Armey, R-Texas, told reporters.