Bailout Negotiations Enter Critical Phase

Congressional negotiators are trying to set the stage for a historic Sunday breakthrough on the $700 billion bailout bill, but Senate Majority Leader Harry Reid says there are still more than a dozen outstanding issues before the deal is cooked.

Friday night was supposed to represent the fall adjournment for the 110th Congress, but instead, negotiators worked through the night on the bailout legislation. At 1:40 a.m., House Republicans knocked off for the night with their push for a more free market friendly proposal. At 3 a.m., Senate staff finished their work, trying to bridge the divides over the size and scope of the bill. At 4:30 a.m., John McCain's presidential campaign plane landed at Dulles Airport, and McCain may be on Capitol Hill Saturday to weigh in on negotiations.

Financial Services Committee Chairman Barney Frank (D-Mass.) still hopes for a deal by Sunday, and Reid thinks Monday votes are possible.

Aides in both chambers are using words like "bicameral" and "bipartisan" _ a marked change from the partisan acrimony that clouded the chaotic White House meeting Thursday afternoon.

That doesn't mean the bailout legislation is completely back on track. But everyone seems to be at the table, and nobody is left out of the negotiations at this stage _ a point House Republicans are celebrating this Saturday morning.

"Bipartisan, bicameral staff meetings are still going on," a House Republican aide said Saturday morning.

Here's a quick rundown of what appears to be in the bill, and what appears to be out.

The fundamental bailout authority is in the legislation, yet it seems likely to be delivered in chunks of $250 billion, followed by $100 billion, followed by congressional signoff for the remainder of the money.

Strong congressional oversight and independent inspector general authority is likely to be in the bill, along with a taxpayer stake in equities that the government plans to buy.

A crackdown on executive compensation has wide support on both sides, but aides in both chambers warn that the actual details of determining who gets paid how much and what those limits are has become be very complicated.

House conservatives will be pleased to learn that both Frank and Sen. Charles Schumer (D-N.Y.) have said that the idea of a government backed mortgage program may be in the legislation _ but they will be unhappy with Schumer's declaration last night that it may not be mandatory.

A Democratic proposal to protect homeowners from foreclosure by allowing bankruptcy judges to restructure their mortgage has been tabled _ even though it's a priority for Banking Chairman Christopher Dodd _ because Republicans see that as a poison pill.

"There is probably 15 issues still outstanding," Reid said as the Senate opened for a rare Saturday session. "We hope sometime tomorrow evening we can announce that there has been some kind of agreement in principle."

Of course, Thursday morning key negotiators announced they had a "fundamental agreement on principles" only to see it blow up by the end of the day when House Republicans revolted.

The Crypt will update throughout the weekend with developments.