“There’s still a lot of different opinions,” Shelby added. “Mine is it’s flawed from the beginning.”

Blindsided?

Sen. Christopher J. Dodd , D-Conn., chairman of the Banking, Housing and Urban Affairs Committee, at midday had announced, “We’ve reached a fundamental agreement on a set of principles.”

But after the meeting with Bush, Dodd said no deal was at hand. He told CNN that “some new core agreement” was put forward at the session by House Republicans, apparently referring to the RSC plan.

He called it a “distraction” and suggested McCain may have had a hand in putting that forward. “I don’t know where John is on this. He gave no indication he was for any particular plan.”

“No one could explain it,” Dodd said.

House Financial Services Chairman Barney Frank , D-Mass., said McCain, who broke off his presidential campaign to return to Washington to get involved in the talks, was “behaving oddly and unconstructively.”

In a statement, McCain’s campaign denied any deal had ever been reached. “As of right now, there exists only a series of principles, including greater oversight and measures to address [chief executive] pay. However, these principles do not enjoy a consensus in Congress,” the statement said.

The statement blamed Obama for the impasse, saying the White House meeting “quickly devolved into a contentious shouting match that did not seek to craft a bipartisan solution.”

Bachus, who was briefed by McCain campaign manager Rick Davis, Douglas Holtz-Eakin, the candidate’s economic adviser and congressional liaison John Green, said: “McCain doesn’t want the $700 billion to go to a few Wall Street firms. They are more interested in the idea of lending.”

Several senior Republicans said Bachus had advocated for trying to work with Frank to revise Paulson’s plan, but RSC members working with Boehner rejected that idea.

Bachus has since joined Boehner’s working group and is promoting the group’s plan. “I think a majority of our caucus supports the working group plan,” Bachus said.

Earlier Details

Under the broad proposal congressional negotiators discussed earlier in the day, Frank said the Treasury’s proposed authority to buy up to $700 billion in troubled assets from the nation’s financial institutions would be parceled out under the draft proposal lawmakers are discussing.

The Treasury would have $250 billion available immediately under the plan, Frank said, but releasing the next $100 billion worth of buying power would be contingent on a certification from the president.

If the Treasury secretary decided he needed the remaining $350 billion, Congress would still have the option to vote and block the funding.

The agreement also would require the Treasury to set limits on executive pay for companies’ that sell their bad assets to the program.

The government could take profit-sharing warrants for all asset purchases, but would also have the ability to take them contingent on whether the government takes a loss when it eventually sells the assets back to the market.

“If we buy an asset and we sell it and lose, there’s a warrant to get” the money back, Frank said.

Frank also said Pelosi wasn’t satisfied with some of the oversight language, and negotiators would have to reopen that section to meet her concerns.

Another sticking point was a Democratic proposal to allow bankruptcy judges to modify the terms of residential mortgages.

Democratic Complaints

At a morning caucus, House Democrats also heard from Laura Tyson, a senior fellow at the Center for American Progress, who advocated for moving legislation being negotiated by leaders of the two parties and the White House. Tyson, who headed the Council of Economic Advisers under President Bill Clinton, is dean of the Haas School of Business at the University of California at Berkeley and serves on several corporate boards, including investment banking company Morgan Stanley.

Tyson got an earful from a number of liberals including Rep. Peter DeFazio, D-Ore., who advocated a new fee of 0.25 percent of every stock transaction to ensure that the government can recoup funds to pay for the aid it provides to lenders. “If this is truly such a catastrophe, I don’t see how anybody can object to a one-quarter of 1 percent fee,” DeFazio said. Others who attended the session said that proposal seemed to be gaining little traction.

Tyson rejected DeFazio’s idea and said she believed the government could recoup any funds it pays for troubled investments “deal by deal” by negotiating terms for financing rather than charging a fee on each transaction.

Pelosi also rebuffed any such short-term step, although she said future measures may be needed to cover any losses the government ultimately suffers from the acquisition of troubled assets.

“I’m optimistic that it will pay for itself and make money, especially if we take an equity position that makes these companies healthy and they come back and put some money back to the Treasury,” Pelosi said. “That’s a down-the-road thing. But there are some people that seek pay-fors now. I don’t think that position will prevail.”

Erin McNeill, Jonathan Allen and Phil Mattingly contributed to this report.