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President Bush discussing the economic crisis during a summit with bipartisan Congressional leaders Thursday. Presidential candidates Sen. John McCain and Sen. Barack Obama - 


Scott Jagow: For a while yesterday, it looked like this Congressional bailout plan was a done deal. Not anymore. That White House summit yesterday turned into a shouting match because House Republicans do not like the plan to buy up toxic assets. Apparently, Treasury Secretary Paulson begged Democrats not to tell anyone how badly this meeting went.

At the same time, we have the biggest U.S. American bank failure ever. Washington Mutual was seized by the government and then WAMU's assets were bought by JPMorgan Chase for $2 billion. We're joined now by our correspondent Jeremy Hobson as Marketplace continues its coverage of the financial crisis. Jeremy, what in the world happened?

Jeremy Hobson: Well, if you want a one-word answer, it's politics. We are a month away from an election. Both of the presidential candidates are in town. These members of Congress, all of whom are up for re-election in a month, at least in the House, are hearing from their constituents. If you listen to what they say about the phone calls they're getting, it's 100 to 1 against this proposal. So, I think that they're just getting very scared about this. This is a huge deal and they aren't ready to pull the trigger on it.

Jagow: And what are the Republicans' alternative to the big bailout package we've heard so much about.

Hobson: Well, one thing they're proposing is to provide insurance to the companies that hold the frozen assets as opposed to just having the government take all these assets on to its books. But one thing that Congressman Barney Frank, the chairman of the House Financial Services Committee, a Democrat, said last night was, look we probably could pass this thing on our own, Democrats and the administration, but we're not going to because it's too big of a bailout. It's too big of a move by the Federal government for it to look like a partisan move.

Jagow: All right. Marketplace's Jeremy Hobson. Thank you.

Hobson: Thanks, Scott.

Follow Jeremy Hobson at @jeremyhobson