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Meetings on Bush's $700 billion bailout proposal continued behind closed doors, a day after opposition from House Republicans threatened to derail negotiations. Bush says Congress will "rise to the occasion" and pass a plan.

President Bush cautioned that the country faces a severe economic crisis. The speech from the White House East Room Wednesday night, followed a second day of hearings on Capitol Hill with Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke. Some lawmakers are pushing the White House to accept a smaller bailout of $150 billion.

After two days of uncertainty, the first debate between Barack Obama and John McCain goes forward as scheduled. The stated topic is foreign policy, but moderator Jim Lehrer of PBS is expected to throw in the hot topic — financial meltdown and the government efforts to respond.

The battered savings and loan company Washington Mutual has become the latest casualty of the subprime mortgage disaster. Regulators say the bank fell over the edge because in the past week or so more and more customers began pulling their deposits out.

The White House meeting on the proposed $700 billion bailout fell apart Thursday. The talks included John McCain, Barack Obama and congressional leaders. Jason Furman, an economic adviser to Obama, and Douglas Holtz-Eakin, who advises McCain, talk about what happened to cause the meeting to break down.

Lawmakers return to Capitol Hill Friday for more negotiations on the Wall Street rescue package. A deal in principle fell through Thursday. David Wessel, economics editor at The Wall Street Journal, says talks broke down over what role the government should play; and what's the best way to structure this huge intervention.

Justice Department report concludes that political partisan considerations played a part in the firings of nine U.S. attorneys in 2006, but stops short of recommending criminal charges against top officials.

Amid the ongoing financial crisis, the Bush administration called the McCain and Obama campaigns into the Oval Office for an emergency summit.

Republican presidential nominee John McCain made a surprising gesture Wednesday by temporarily suspending his campaign to help work on the bailout plan. The Arizona senator also proposed delaying Friday's first presidential debate with Barack Obama.

Pakistan's outgoing President Pervez Musharraf was a close U.S. ally in the fight against al-Qaida. But critics say the Bush administration relied on him too much, and that he didn't do enough to rein in the Taliban. With Musharraf out, Pakistan is expected to concentrate on preventing extremism inside Pakistan rather than across the border.