WASHINGTON, Sept 28: US lawmakers who struck a post-midnight deal on a $700 billion bailout for the financial industry predicted on Sunday it would pass Congress, putting in place the largest US government intervention in markets since the Great Depression of the 1930s.

Negotiators sought to iron out the final shape of the legislation, which House Republicans still had to review. It was their fierce opposition to a federal rescue that nearly torpedoed an emerging bipartisan pact late in the week.

But officials in both parties were hopeful for a House vote on Monday, and the two presidential candidates said they probably would support it when it comes up for a vote in the Senate.

Under the rescue plan, the government would pump as much as $700 billion into beleaguered financial firms that are starving for cash, taking over huge amounts of devalued assets from the companies in the hopes of unlocking frozen credit.

The proposal is designed to end a vicious downward spiral that has battered all levels of the US economy, in which hundreds of billions of dollars in investments based on mortgages gone bad have cramped banks’ willingness to lend.

“This is the bottom line: If we do not do this, the trauma, the chaos and the disruption to everyday Americans’ lives will be overwhelming, and that’s a price we can’t afford to risk paying,” Sen Judd Gregg, the chief Senate Republican in the talks, said.

“I do think we’ll be able to pass it, and it will be a bipartisan vote.”

A breakthrough came when Democrats agreed to incorporate a Republican demand – letting the government insure some bad home loans rather than buy them – designed to limit the amount of federal money used in the rescue.

Another important bargain, vital to attracting support from centrist Democrats and Republicans who are fiscal hawks concerned about the growing federal budget deficit, would require that the government, after five years, submit a plan to Congress on how to recoup any losses.

The plan would give Congress a stronger hand in controlling the money than the Bush administration wanted. Lawmakers could block half the money and force the president to jump through some hoops before using it all. The government could get $250 billion immediately, $100 billion more if the president certified it was necessary, and the last $350 billion with a separate certification – and subject to a congressional resolution of disapproval.

Still, the resolution could be vetoed by the president, meaning it would take extra-large congressional majorities to stop it.

The presidential nominees came behind the outlines of the bailout.

“This is something that all of us will swallow hard and go forward with,” said Republican Sen. John McCain of Arizona. “The option of doing nothing is simply not an acceptable option.”

His Democratic rival, Illinois Sen. Barack Obama, sought credit for taxpayer safeguards added to the initial proposal from the Bush administration. “I was pushing very hard and involved in shaping those provisions,” he said.—AP