A high-stakes game of political poker was under way in Washington yesterday as Congress prepared to vote this week on a plan to create a $700bn fund to buy toxic assets from banks and thereby ease the credit squeeze.
Democratic legislators pressed for a housing programme to be added to the bill and demanded assurances that President Bush would not veto a subsequent second stimulus bill.
The Bush administration was trying to hold out for a 'clean' bill that dealt only with the financial rescue, while Republicans in Congress said they would fight a hasty compromise that included many add-ons.
The political negotiations came as Hank Paulson, US Treasury secretary, called on other nations to follow the US in tackling the problems in the global financial system. 'I will be pressing my colleagues around the world to design similar programmes for their banks.' The US is not asking other governments to join its proposed fund.