WASHINGTON DC – A bipartisan group of House and Senate lawmakers left a two-hour-plus meeting in the U.S. Capitol on Thursday saying they have a “fundamental agreement” on a $700 billion plan to bail out U.S. financial markets, as early as Sept. 29, the Wall Street Journal reported Thursday.

The lawmakers didn’t offer details of the plan, but the proposed bill would approve the fund, but would pay the money out in installments, with $250 billion in bailout funds available immediately, people familiar with the matter said.

Lawmakers also agreed that limits on golden parachutes and use of warrants would apply to all companies, these people said. However, changes to bankruptcy laws still unresolved. The details still need to be ironed out with the White House.

Republican Sen. Robert Bennett of Utah expressed optimism that lawmakers have a “plan that will pass the House and Senate.”

Rep. Barney Frank, second from left, and Sen. Chris Dodd, third from right, spoke with reporters after congressional leaders said an agreement was reached on a bailout package.

Banking Committee Chairman Christopher Dodd (D., Conn.) said lawmakers plan to “act expeditiously” to pass legislation allowing the federal government to buy billions of dollars in distressed assets. The final legislation is expected to vastly expand on a Treasury proposal issued last weekend. It potentially includes some limits on executive compensation for companies that sell their assets to the government and some way for the government to recoup the money it spends to help free illiquid credit markets.

Democratic leaders hoped to nail down details of the measure Thursday, ahead of an extraordinary summit meeting in the afternoon at the White House, which will bring together Republican and Democratic presidential nominees, along with Bush and top leaders from Congress.

Much is still uncertain and the contours of a likely bill could change. But the outlines of a potential compromise began to emerge late Wednesday after congressional leaders started considering restrictions on the bailout plan that could break the pool of money into installments.

A likely bill would include limits on executive pay in situations where the government puts a large amount of money into a failing institution. In certain cases, the government could receive warrants that would give it the right to acquire shares in the company. Also included is beefed-up oversight through the Government Accountability Office, an investigative arm of Congress.

Likely not included is a controversial idea to let judges alter the terms of mortgages during bankruptcy proceedings.

The basic building blocks of the bailout plan as initially proposed remain intact: Democratic leaders are still proposing to authorize Treasury to borrow up to $700 billion to buy hard-to-sell assets from troubled financial institutions. The goal is to calm financial markets by removing the toxic assets, mostly mortgages, which lie at the heart of the crisis. If a final deal is struck, it would represent one of the biggest government bailouts in U.S. history.

Whether the Bush administration will agree to the entire Democratic wish list of provisions isn’t clear. Its room to maneuver will be limited, having urged Congress this week to act quickly to forestall financial calamity.

One scenario being discussed by Democrats would be to establish benchmarks to periodically measure the bailout’s performance. Those benchmarks would have to be met before further allotments of government money could be used — in effect, potentially breaking the bailout funds into several installments. The administration doesn’t want Congress to split up dispersing the funds, particularly if that would require returning for continual congressional approval, according to people familiar with the matter.

There is less resistance to the idea of having an independent oversight board approve the installments, depending on who sits on the board. But the hope within the administration is that beefed-up oversight will negate the idea, these people said.

Unknown still is the reaction from rank-and-file lawmakers, particularly conservatives, many of whom have been strongly opposed to the plan. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke testified once again before skeptical members of Congress — both Democrats and Republicans — following a similar hearing Tuesday in the Senate.

Adding to the pressure on lawmakers to do a deal, billionaire investor Warren Buffett said he wouldn’t have considered investing in Goldman Sachs Groups Inc., a move he announced Tuesday night, if he didn’t think the bailout would be approved. “I really do think Congress will do the right thing, when it’s terribly important, and they will do it fast,” he said. “They will haggle but they have the national interest at heart.”

The idea to set benchmarks to measure the plan’s success was a new wrinkle that emerged Wednesday, when Democratic party leaders started debating the possibility. Any benchmarking plan, however, itself remains a rough outline. A key issue would be deciding how to judge whether the benchmarks were being met, and whether that authority would reside with the administration or with an independent board that would be created to oversee the rescue plan.

Democratic leaders have discussed holding a quick vote on perhaps one-third of the funds sought by the administration, with a second vote later on the rest. That option is considered less likely, although congressional aides and lawmakers cautioned that nothing has been ruled out.

This story was published in The Wall Street Journal.

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