Live from the Capitol, it's Saturday night

Time may be running out for House Republicans opposed to the Bush administration's financial bailout plan.

Sen. Bob Bennett (R-Utah) warned Saturday of another impending bank failure, and Republican Senate leaders — plus GOP Sens. Pete Domenici (N.M.), John Sununu (N.H.) and Judd Gregg (N.H.) — laid out doomsday scenarios in a Republican Senate Conference meeting.

Sources say that as many as 40 Republican senators are prepared to vote for the emerging bailout deal if bankruptcy and social spending provisions are dropped.  And while Senate Minority Leader Mitch McConnell (R-Ky.) is not yet ready to abandon House Republicans — or John McCain — sources say his views may change if there's no deal by Sunday evening.

The principal congressional negotiators —  Gregg, Sen. Chris Dodd (D.-Conn) and Reps. Barney Frank (D.-Mass) and Roy Blunt (R-Mo.) — participated in a  new negotiating session with Treasury Secretary Henry Paulson in the Capitol office of Speaker Nancy Pelosi (D-Calif.) Saturday evening.

Paulson and Blunt left the meeting just before 6 p.m. for what they said would be an hour-long break. Blunt said the negotiators were making progress and would work "through the night" if necessary.

Just before 7 p.m., reporters waiting outside Pelosi’s office asked McConnell if he thought there would be an announcement of any kind Saturday night.

"I'm optimistic that they're going to move forward,” he said. “You know Sen. Reid and I would like the Senate to be voting on this Monday — that’s our goal."

In a sign that negotiations were getting serious, members imposed a no-BlackBerry rule on staff taking part  in the session.

Minutes before the latest round of principals-level negotiations began,  House Minority Leader John Boehner (R- Ohio) said his members would  not agree to a bill “that bails out Wall Street at the expense of American taxpayers.”

"Somebody, maybe it was Einstein, said things should be done as quickly as possible, but no quicker than possible," Blunt, the House Republican whip,  added. "We're not moving on any kind of artificial timeline. We're moving toward the very best solution in the shortest period of time."

House Republicans are still overwhelmingly opposed to any package that would authorize Treasury to buy hundreds of billions in devalued mortgage-related assets. This puts Blunt in a difficult spot as he tries to win concessions that will bring his members on board.

The open question: Would Pelosi —  who has said previously that Democrats won't pass the Bush administration bailout by themselves — have enough Democratic votes to move the measure if Senate Republicans are on board but House Republicans aren't?

In an effort to shore up support from fiscally conservative Blue Dog Democrats, Pelosi and House Majority Leader Steny Hoyer (D-Md.) are now pushing a plan that would require Wall Street to help repay the federal government if taxpayers lose money through the purchase and resale of mortgage-related assets.

From the other side of the aisle, McCain has been calling House Republicans to test support for the rescue plan, one of the lawmakers contacted said. At about 5:30 p.m. Saturday, the McCain campaign released a list of calls it said the candidate had made Saturday. In addition to President Bush and Paulson, the campaign said McCain had been in touch with McConnell, Gregg, Sen. Jon Kyl, Boehner, Blunt and nine House Republicans.

McCain arrived back in Washington just before dawn Saturday, and his campaign said he planned to “resume negotiations with the administration and congressional leaders from both parties to forge a bipartisan solution to our economic crisis.”

Republicans are clearly worried that their presidential candidate’s first effort to engage in the bailout negotiations didn’t come off as well as they might have hoped — that in the public’s mind, a deal was close until McCain parachuted in to save the economy and, by turns, his presidential campaign, only to have a White House meeting collapse and the candidate leave town for the debate in Mississippi with the various factions farther from a deal than they’d been before he'd arrived.

Democrats derided McCain’ decision to return to return to Washington as a blatantly political – and completely unnecessary – maneuver.

Frank, the House Financial Services chairman, joked that McCain’s gesture reminded him of the late comedian Andy Kaufman doing his famously understated rendition of the Mighty Mouse theme, “Here I Come to Save the Day.”

"We are making very real progress," Frank said at the time. "This is a stunt. I hope people will be able to ignore it. He doesn't bring anything to it."

House Republicans worked hard Friday to recast those events.

What actually happened, they said: By not taking a stand on the modified version of the Treasury plan that Democrats, Senate Republicans and the White House seemed nearly ready to support, McCain gave House Republicans the time they needed to force a better deal for taxpayers and homeowners alike.

During a brief session in the Capitol on Friday, McCain reminded a small band of Republican leaders that he had given them a political opening in the landmark legislative fight.

According to people present, McCain then told his congressional colleagues, “Now, go get something.”

While McCain greeted his top allies on Capitol Hill Thurday, lawmakers were working toward a compromise deal in a bipartisan, bicameral meeting. When that meeting ended, both Dodd, the Democratic chairman of the Senate Banking Committee, and Bennett said that negotiators had agreed on a plan that could pass both houses of Congress and be signed by the president.

Gregg told Politico Friday that the compromise wouldn’t have come together so quickly if Democrats hadn't known that McCain was on his way. “We wouldn’t have had as much movement [Thursday] as we did have, if he hadn’t come to town and some of our colleagues on the other side of the aisle wanted to upstage him,” Gregg said.

With the deal struck, Republicans in the House believed that the trap was set, not so much for McCain as for their own leader, Boehner.

As House Republicans saw it, Democrats and the White House were close to a deal and just needed McCain to sign on so they could roll Boehner under the bus and claim a bipartisan victory.

Boehner himself had emerged from a brief meeting with McCain earlier that day in his Capitol office unsure what the presidential candidate would do.

But if the Democrats and the White House were ready for a game of “ganging up on Boehner” – as the minority leader would describe it later – McCain didn’t play along.

At the White House, Bush beseeched lawmakers to join him in announcing progress toward a deal. According to one report, the president asked, "Can't we just all go out and say things are OK?"

But McCain said little during the White House meeting. And when it ended, neither he nor Bush nor Barack Obama said anything at all to the reporters waiting outside in the rain.

In a statement Friday morning, the McCain campaign said the meeting “was spent fighting over who would get the credit for a deal and who would get the blame for failure.”

Most important: “There was no deal or offer yesterday that had a majority of support in Congress.”

That play gave Boehner, whose rank-and-file was in an open revolt against the Bush administration plan, more room and more time to operate.

It’s not what House Republicans were expecting. McCain has a strained relationship with many of his GOP colleagues, some of whom view him as a political opportunist who chooses personal glory over partisan loyalty.

Asked before the White House meeting if McCain would have any impact on the debate over this bailout, Rep. Kevin Brady (R-Tex.) said, “No.”

“The Democrats and the White House want everyone to go down there and have a big group hug,” Brady said of that meeting. “I’m not so sure he’s going to be a part of that group hug.”

Boehner himself had said he didn’t know what whether McCain could help.

Republicans acknowledge that McCain’s first trip back to Washington didn’t shift votes in either direction; even they acknowledge that they don’t know what, exactly, their presidential candidate thinks of the Treasury plan. But they credit McCain with creating an opening they didn’t have before.

“(The trip) played a very important role in elevating this to a serious crisis for most voters,” Putnam said.

Gregg agreed, saying that the trip focused voters’ attention on the financial problem in a way that nothing else had: “People suddenly said, ‘Oh wow this must be really, really bad if you’ve got both presidential campaigns . . . coming to Washington,” Gregg said.

On Friday morning, McCain paid Boehner a follow-up visit in the leader’s large Capitol suite. They were joined by Putnam, Blunt – the GOP whip -- and his chief deputy, Virginia Rep. Eric Cantor, who played a central role crafting the Republicans’ alternative.

The presidential candidate told the assembled congressional leaders that he was initially skeptical about Paulson’s grave economic warnings, but that he became convinced after a series of briefings that the need was very real. Congress had to pass something over the weekend, McCain said.

But he told the group that Peloi had a choice: She could either allow her negotiators to craft a package that Republicans would accept, or she could make it a partisan vote by attaching the plan to a must-pass stop-gap funding bill that lawmakers from both parties would be compelled to support.

If she chose the latter category, McCain told the Republican leaders that they could vote against the hugely unpopular measure and he would help them make that vote a campaign issue on the trail.

Before he left, he told the group that he needed to fly to Mississippi for the first presidential debate, so he wouldn’t be sticking around either way.

But, he told them, “You guys need a negotiator.”

That same morning, Boehner tapped Blunt to fill the role, jump-starting a legislative conversation that had stalled; just the night before, House Republicans had refused to send a representative to a meeting with Paulson, the Democrats and Senate Republicans.