September 30, 2008 Markets rebound as negotiations continue Play video

(NECN: Peter Howe) - The bailout deal is not done yet. The White House is trying to send that message to anxious Americans today.

The President spoke this morning, urging congress to quickly approve a plan to rescue the struggling economy. Congress is officially on break for Rosh Hashanah, but behind-the-scenes negotiations are still on-going. Meanwhile - the markets rebounded on hopes that some kind of deal can still be reached.

Even after a week of compromise negotiations, President Bush's plan for a 700 billion dollar bailout of Wall Street went down to stunning defeat in the house Monday. Now both parties say they want to try again to get something passed. But what could be done to make the deal more popular? Two big ideas have surfaced.

The plan would raise the FDIC insurance limit on people's and businesses bank accounts from 100 thousand to 250 thousand dollars, the first increase since 1980. It's seen as a very minimal cost solution to prevent the threat of bank runs.

BC professor Alicia Munnell served as assistant US treasury secretary and White House economic advisor in the Clinton Administration. “That's probably a good thing, probably not costly, and it shows that we're really concerned about Main Street.”

BU banking and financial law scholar con Hurley says the FDIC change doesn't address the root of today's crisis. “What we are looking for is not the perfect solution; we're looking for the political solution. This may be

Another idea is to ease accounting rules, called mark to market, to reduce huge but just on paper losses banks are carrying for temporarily distressed mortgages. It's thought this could ease lending and borrowing and soften the credit crunch.

It’s a very difficult and complex to resolve when we're in the midst of a crisis

But still Munnell says it could get the votes the bailout plan needs.

Suspension for some period of time and then looking at it may assuage some of the concerns people have.