I don't see the Democrats going along with even a modified version of the administration proposal unless the President and McCain can pull significant Republican congressional support behind the plan. Why should they go out on a limb while the Republican lawmakers play it safe?
It is time for McCain to play a leadership role in this battle. He needs to pick a side and support it publicly. Instead, we're getting a sort of mealy-mouthed attempt to placate the far right of his own party. From the AP story:
At one point in the White House meeting, according to two officials, McCain voiced support for Ryan's criticisms of the administration's proposal. Frank, a gruff Massachusetts liberal, angrily demanded to know what plan McCain favored.
These officials also said that as tempers flared, Bush struggled at times to maintain control.
At one point, several minutes into the session, Obama said it was time to hear from McCain. According to a Republican who was there, "all he said was, 'I support the principles that House Republicans are fighting for.'"
The modifications proposed by the Democrats all seem to me to be reasonable:
To be sure, Democrats demanded a number of changes in his $700 billion bailout plan, but administration insiders signaled they probably were acceptable. They included greater oversight, more protections for taxpayers, efforts to head off home foreclosures and piecemeal allocations of the federal money to buy toxic mortgage securities.
I also like the idea of limits on executive pay for participating companies, though I don't see that one passing in any substantive way. Everyone knows that investment bankers have taken home outlandish bonuses based on inflated valuations of these same CDOs that underlie the crisis in the first place. I don't see that it is unreasonable to ask them to take a pay cut to make up for their excesses.