The federal bailout of Wall Street is in limbo after Republican lawmakers refused to support an emerging deal between the Bush administration and Democratic leaders. The surprise move came hours after it appeared all sides were close to an agreement. The proposed deal would spend some $700 billion to buy up defaulted Wall Street debts, while also imposing some executive pay limits and granting the government equity that could possibly be sold to help recoup the bailout costs. But as talks progressed, congressional Republicans emerged to propose an alternative plan emphasizing insurance for mortgage-based assets and further deregulation of the financial sector. Lawmakers huddled at the Capitol Building until late in the evening. Democratic Congress member and House Banking Committee Chair Barney Frank blamed Republicans for the delay.

Rep. Barney Frank: “House Republicans stayed for a while and then left. And at this point we are told that the House Republicans have no plan to participate in helping draw this up or having any commitment to help pass it.”

Many Democrats pointed the finger at Senator John McCain, saying his involvement in the talks helped derail an emerging deal. Connecticut Senator and Senate Banking chair Christopher Dodd called the meeting “a rescue plan for John McCain.” McCain has been accused of waging a political stunt after announcing he would suspend his campaign to help push through an agreement on the financial crisis.