E-mail this story to a friend Have comments? Send them to the editor. Printer Friendly Version Subscribe for Free!

WASHINGTON (AP) -- The Bush administration lobbied skeptical lawmakers Wednesday to support a rescue plan for Fannie Mae and Freddie Mac, as lawmakers weighed how to protect taxpayers while still giving the government unfettered power to pour money into the mortgage giants.

The administration's request for urgent action to prop up the troubled companies has sparked concern in Congress, particularly among Republicans who are loath to let the government interfere in financial markets. But it's also sweeping away the last obstacles to a separate broad housing package that's expected to clear Congress by the end of the month.

"I'm uneasy, as are many (lawmakers), about unlimited authority, and we may need to do things to give taxpayers assurance," Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, said in an interview. "We're going to make sure that what we're doing here is not going to expose them to a disastrous situation down the road."

Dodd is consulting with Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, and Treasury Secretary Henry M. Paulson on the details of the proposal.

Paulson worked the phones and met with lawmakers Wednesday seeking to allay Republicans' fears about the plan, which specifies no upper limit for what the government could spend to prop up the mortgage giants.

Paulson argues that he's proposing a backstop that won't have to be used, and that placing a dollar amount on it would spook markets and exacerbate the problem.

In a closed-door meeting, Paulson asked an at-times hostile audience of House Republicans to support the rescue, which he described as vital to stabilizing capital markets and the broader economy.

"I am optimistic that this is going to be done quickly, and it's not blind optimism," Paulson said after the meeting.

"Members clearly have concerns," said Rep. John A. Boehner, R-Ohio, the minority leader. "But I do think at the end of the day this proposal is likely to become law."

Republicans who gathered in a basement meeting room for the late-afternoon session stood and blasted the proposal, some denouncing a foreclosure rescue that's part of the broader housing bill, and others focusing on the potential costs of the help for Fannie and Freddie -- entities whose very existence is anathema to many in the GOP.

"If these entities are too big to fail -- and I will concede that that may in fact be true -- we ought not to be ever in a position where they're too big to fail again," said Tom Price, R-Ga.. He said Congress should consider overhauling Fannie Mae and Freddie Mac -- perhaps privatizing them -- in exchange for any backstop.

With shares of Fannie Mae and Freddie Mac plummeting on fears about their financial stability, the Federal Reserve and the Treasury Department on Sunday unveiled a plan to throw them a lifeline. The two government-sponsored companies hold or guarantee more than $5 trillion in mortgages -- almost half of the nation's total.

>> Continued -- Page 1 2

Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.