Obama confident deal will be struck 'eventually'

A deal to solve the US financial crisis will happen “eventually” after an emergency meeting at the White House ended without an agreement, Barack Obama said today.

The discussions between President George Bush and the two presidential candidates in the West Wing, just 40 days before the election, was thought to be unprecedented in US history and increased the pressure on those involved to come to an agreement.

The president has said a rescue plan needs to be agreed “immediately” if the US wanted to avoid a “financial panic” and a “long and painful recession”.

Many political pundits believed the talks would result in a deal after Democratic and Republican negotiators reached a “fundamental agreement on a set of principles” on Capitol Hill earlier in the day.

But those who took part in the meeting left saying that no agreement had been reached.

“I think eventually we’re going to get a deal,” Mr Obama told CNN.

“I think there’s still some work that needs to be done.”

The 47-year-old Illinois senator said that the US “should not have been in this crisis in the first place” and said it was a consequence of “reckless behaviour on Wall Street” and “regulators being asleep at the switch”.

Mr Obama added there needed to be a “sense of urgency” from everyone involved and said: “We’ve got to move rapidly.”

He said negotiators were “ready to move forward before John McCain and I even landed here in Washington”.

“Something happened in the intervening hours,” he said.

“The concern that I have, and one of the concerns that I’ve had over the last several days, is that when you start injecting presidential politics into delicate negotiations, then you can actually create more problems rather than less.

“It’s amazing how much you can get done when the cameras aren’t on and no-ones looking to get credit or allocate blame.

“I think that both myself and Senator McCain need to be very careful in terms of how we inject ourselves into this process.”

His Republican rival Mr McCain suspended his presidential campaign yesterday to travel to Washington to focus on the economic crisis.

After the meeting, the 72-year-old Arizona senator said some members of the US Congress had “legitimate concerns” about the substantial price tag for taxpayers, but that those critics were aware of the crisis the country faced.

He also said he was hopeful that an agreement would be reached so he could attend the first presidential debate, scheduled to take place in Mississippi at 8pm local time tonight (2am BST on Saturday).

Mr McCain had called for it to be postponed, but Mr Obama said the debate should go ahead and added: “Presidents are going to have to deal with more than one thing at a time.”

Democratic senator Chris Dodd, chairman of the Senate Banking Committee, said the prospects of an agreement changed during the White House meeting.

“All of a sudden there was some new kind of core agreement floating around, which no-one had heard of before until we got to the White House,” he said.

Mr Dodd said he had been working with “serious people” to find agreement around different core issues for seven days and agreed the meeting was contentious “for a moment or so”.

“We’ve been spending a lot of time, I’m tired, I’ve spent seven straight days at this, trying to come up with a work-out plan for our economy, a rescue plan,” he said.

“What this looked like to me was a rescue plan for John McCain for two hours, and it took us away from the work we were trying to do today – serious people trying to do serious work to come up with an answer.”

He said it was a “sad day for the country” and the situation was “grave”.

“To be distracted for two or three hours by political theatre doesn’t help,” he added.

Earlier, after negotiations behind closed doors on Capitol Hill, he had said he was “very confident” that the US Congress could now act “expeditiously” and approve the plan.

Congressional aides said the plan would have given the Bush administration just a fraction of the money it wanted up front, with half the $700bn (€478bn) total subject to a congressional veto.

The core of the plan involved the US government buying up troubled assets in a bid to keep them from going under and to stave off a recession.

Ed Gillespie, the White House counsel to Mr Bush, told CNN that those involved with the presidential talks had “no doubt” that the US needed to act and described it as a “good meeting”.

“We’re getting close,” he said.

At the start of the meeting, Mr Bush said he hoped that an agreement could be reached “very shortly”.

He thanked Mr Obama and Mr McCain for coming together and praised US political leaders for their spirit of “bipartisan co-operation” in Washington.

“We are in a serious economic crisis in the country if we don’t pass this piece of legislation,” he said.

“We know we’ve got to get something done as quickly as possible and this meeting is an attempt to move the process forward.

“My hope is that we can reach an agreement very shortly.”

The failure of the White House meeting to reach a deal was first revealed by Alabama Senator Richard Shelby, the top Republican on the Senate Banking Committee.

He told reporters outside the White House that there was “obviously no agreement” and that the proposals by US Treasury Secretary Hank Paulson constituted a “bad plan”.

Both of Congress’ Republican leaders, John Boehner and Senator Mitch McConnell also denied there was any deal.

“It’s clear that more progress is needed and we must continue to work together quickly to protect our economy,” Mr McConnell said.