Paulson’s $700bn bailout of troubled assets casts wide net

In a revised submission to Congress, the Treasury now proposes buying all kinds of "troubled assets", although it hasn't specified what type it means.

The change suggests car and student loans, credit-card debts and any other troubled assets could be included in the final plan.

That may mean that the eventual size of the package increases from initial estimates.

The Treasury also said it would limit its $50billion plan for insuring money-market funds to those held by investors as of last Friday, bowing to pressure from the American Bankers' Association (ABA), which was worried that savers shift funds from their bank accounts into money-market funds.

"If all money-market mutual funds had been included with the government guarantee moving forward, this proposal would have threatened to take money out of local federally insured banks," said Edward Yingling, president of the ABA in Washington.

The changes reflect the intense negotiations taking place across Washington on the eventual shape of the plan with the Treasury trying to amass as much scope and flexibility as possible.

Treasury Secretary Hank Paulson also wants foreign firms to be covered by the scheme — a measure likely to meet resistance on Capitol Hill.

Politicians also have a shopping list that includes oversight through the Government Accountability Office, the refinancing of mortgages for struggling homeowners and curbs on executive pay.

Congressional panels have scheduled two hearings this week on the crisis and the plan to deal with it, with the Federal Reserve chairman Ben Bernanke appearing at a third hearing on the economic outlook.