Washington - President Bush readied a prime time speech to the nation and Treasury Secretary Henry Paulson accepted a major change in legislation for a $700 billion bailout of the financial industry on Wednesday as the administration scrambled to prevent further deterioration in the economy.
Republican officials said that Paulson had bowed to demands from critics in both parties to limit the pay packages of executives whose companies benefit from the proposed bailout. They spoke on condition of anonymity because Paulson's decision had not been formally announced.
White House officials said Bush's speech would dwell on the financial crisis.
Press secretary Dana Perino said the president wants to tell the American people how the crisis affects them and help them understand the depth of the problem.
The developments came as the administration sought to overcome obstacles in Congress to speedy enactment of an unprecedented government bailout of the beleaguered financial industry.
Federal Reserve Chairman Ben Bernanke told Congress on Tuesday that failure to act quickly could trigger deepening in the credit crisis that would lead to a recession, with rising unemployment and increased home foreclosures.
Appearing before lawmakers for the second day in a row, he added on Wednesday that global financial markets are under "extraordinary stress."
Paulson, who with Bernanke heard withering criticism of the bailout plan on Tuesday, met for the second consecutive day with House Republicans, some of whom have announced their opposition to any federal bailout of the private financial markets that form the backbone of American capitalism.
Other Republicans appear to be more open to legislation, according to congressional and administration officials, although on different terms than the White House proposed last weekend.
Majority Democrats have also criticized the administration's legislation, demanding major changes. At the same time, they have stressed they stand ready to work with the White House to head off an economic catastrophe.
House Speaker Nancy Pelosi met with administration officials to discuss the legislation, and told reporters later, "we're moving in a productive direction." She declined to discuss specifics.
Amid speculation that votes on any legislation could slip into next week, she said, "We'll finish it when it's ready. I'd rather it be sooner rather than later."
Numerous Democrats have said privately in recent days they are wary of voting for the administration's proposed legislation without significant Republican support.
Administration Said to Agree to Limit on Pay