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Washington edges towards revised bailout deal -

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LISA MILLAR: There's a glimmer of hope in Washington that the White House and congressional leaders
will manage to salvage a plan to stabilise America's financial sector.

The stalled Wall Street rescue package may be revived by the end of the week.

But part of the problem in convincing Americans of its necessity is that the man pushing the deal,
George W. Bush, is politically weaker than at any time in his presidency.

Washington correspondent, Kim Landers reports.

KIM LANDERS: The President has again been offering fresh warnings, but no new ideas, about the
urgent need for a multi-billion dollar rescue package for the financial industry.

GEORGE W. BUSH: We're facing a choice between action and the real prospect of economic hardship for
millions of Americans, for the financial security of every American Congress must act.

KIM LANDERS: George W. Bush has delivered this plea before.

He's used brief remarks to the media, prime time speeches to the nation, even an unprecedented
White House crisis summit with both presidential contenders.

But his inability to persuade enough people to back the bailout bid shows just how politically weak
he's become.

With the presidential election just five weeks away, a lot of attention is focused on Republican
nominee John McCain and his Democratic rival Barack Obama.

Both are pledging new efforts to persuade their party colleagues of the need to act.

John McCain has delivered his pep talk at a meeting of small business owners in Iowa.

JOHN MCCAIN: To the state the obvious we are in the greatest financial crisis of our lifetimes.
Congressional inaction has put every American in the entire economy at the gravest risk.

Yesterday the country and the world looked to Washington for leadership and Congress once again
came up empty handed.

KIM LANDERS: Barack Obama says there's plenty of blame to go around. But he's told a rally in
Nevada that all politicians now have a responsibility to act, because the crisis is affecting the
financial well-being of every American.

BARACK OBAMA: There will be time to punish those who set this fire, but now is the moment for us to
come together and put the fire out.

(crowd cheers)

I mean think about it, think about it, if your neighbour's house is burning, you're not going to
spend a whole lot of time saying well that guy was always irresponsible, he always left the stove
on, he always was smoking in bed. All those things may be true, but his house could end up
affecting your house and that's the situation we're in right now.

KIM LANDERS: Eric Davis is a Professor Emeritus of political science at Middlebury College in

He says decisions that are made now about the America's financial crisis will affect whoever wins
the presidential race.

ERIC DAVIS: Some of the decisions that are going to be made, both on Capitol Hill and in the
markets over the next three months will determine whether the next president faces a very deep
recession that's going to be there for most of his four-year term, or whether it's a period of
economic difficulty that might only last only say a year or 18 months.

KIM LANDERS: Who is doing a better job of convincing the American public that they would be the
better steward of the American economy, is it John McCain or Barack Obama?

ERIC DAVIS: The polls indicate that American's have more confidence in Obama as an economic manager
than McCain. I believe that's for two reasons, first of all, in times of economic difficulty,
Americans tend to favour the Democratic Party, it's seen as the party that's more in sympathy with
the interests of the middle class and the common person.

Second I believe over the last two weeks, Obama has presented the image of cool and collected
leadership while McCain has been floundering around and has seemed sometimes to be acting
impulsively rather than in a considered and deliberative way.

KIM LANDERS: Did John McCain manoeuvre himself into a bit of a political dead end by putting his
campaign on hold, coming to Washington, injecting himself into the bailout talks and yet it was his
own Republican Party which didn't help to deliver the numbers and ended up defeating this bailout
bill on the floor of the House.

ERIC DAVIS: If the bill had passed on the House floor, then McCain could have claimed some credit
for it, he could say that what he did in terms of coming back to Washington, making calls to
members over the weekend helped ensure it passes.

But since a substantial majority, 2-1 of Republican members voted against it, it's very difficult
for McCain to claim that he contributed to anything positive and perhaps indeed his intervention
ended up leading some more Republicans to vote against it.

KIM LANDERS: How would you rate George W. Bush's ability to influence the debate about this bailout
plan and about the financial strife that the country is facing?

ERIC DAVID: Bush has been on television nearly every day for the past week, whether it's for a
nationally televised speech; speeches from the White House in the morning; meetings while foreign
leaders are visiting him. And so far his interventions don't seem to have had much affect at all.

If the banks are running out of financial capital, George Bush is running out of political capital,
and it's hard to see whether there's a rescue plan in the future for him.

LISA MILLAR: That's Professor Eric Davis ending the report from our correspondent Kim Landers.