Some conservatives say Americans may want to keep their government divided.

(CNN) – A McCain senior advisor and a major campaign surrogate suggested Sunday that the GOP’s poor prospects in the House and Senate should give a boost to the Republican presidential nominee’s candidacy.

"Do we really believe that the American public is going to feel safe by having both the head of the Congress and the head of the White House from the same party that has had so many challenges with the way they’ve run Washington over the last couple of years?" McCain campaign manager Rick Davis asked on Fox News Sunday.

It’s a strategy popular with some high-profile conservative voices. Last month, columnist George Will urged McCain to make the idea his “closing argument,” pointing to the fact that the Democratic Congress was drawing approval ratings even more dismal than President Bush’s historic lows: “His argument should assert the virtues of something that voters, judging by their behavior over time, prefer — divided government,” he wrote, that “compels compromises that curb each party's excesses.”

And in June – just weeks after the Democratic primary race drew to a close – Wall Street Journal columnist John Fund made essentially the same case, citing the the strategy’s effectiveness for congressional Republicans in 1996.

“Facing a presidential defeat in addition to losses in Congress, Republicans boldly appealed to the public's fondness for divided government,” wrote Fund, pointing to GOP ads that year that featured “a fortune-teller staring into a crystal ball showing over-the-top scenes of Biblical devastation, plague and conflict,” that accused the media of trying to keep voters from the polls, and warned of the consequences of “hand[ing] Bill Clinton a blank check” by giving one party control of two branches of government.

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A second stimulus package is in the works.

WASHINGTON (CNN) – House Democratic leaders are putting together a second economic stimulus package costing as much as $150 billion and are likely to call Congress back shortly after the election to vote on the measure, according to several Democratic leadership aides.

The details are still in flux, but one aide said the price tag would be "somewhat north of $100 billion" and would include "a heavy emphasis on help to state and local governments." One way to help states would be to fund the mandatory state match for Medicaid programs so that states would not have to slash education and other programs to cover it.

Before Congress recessed last week for the election, the House of Representatives passed economic aid measures totaling $61 billion to fund infrastructure projects, money for states' Medicaid costs, and unemployment assistance. But these bills failed to attract enough support in the Senate and the White House opposed them.
Speaker Nancy Pelosi, D-California, traveling in Denver, Colorado, on Wednesday, said, "With all that happened in the past few weeks, it probably has to be more like a $150 billion to invest in our economy, to create jobs, to help the states, to help men and women across the country."

Pelosi and other House Democratic leaders are scheduled to meet with a group of economists on Monday in Washington to discuss the size and the components of a stimulus plan, the Democratic aides said. These aides indicated that in addition to aid to states struggling with their own budgets, the package could include things similar to what the House passed before, such as infrastructure money, an extension of unemployment benefits, food stamps, and more money for low-income energy assistance.

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The $700 billion bailout may be taking more of a toll on congressional Democrats.

(CNN) — The nation's financial crisis and the subsequent $700 billion government bailout may be taking more of a toll on congressional Democrats than their Republican counterparts.

In a CNN/Opinion Research Corporation poll, a generic congressional Democrat beats a generic congressional Republican by 5 points, 52-47 percent. That margin has narrowed considerably from three weeks ago, when Democrats held a 14 point lead in a similar CNN/Opinion Research Corporation poll.

But voters give slightly lower approval ratings to Congressional Republicans than Democrats. The poll shows only 34 percent approve of the Democratic leadership's performance, while 27 percent say the same for Republican leaders. Overall, more than three fourths of voters disapprove of Congress' performance.

“The public is essentially saying ‘a pox on both your houses’ to the parties in Congress,” noted CNN Senior Political Researcher Alan Silverleib. “Both the Democrats and the Republicans are held in extremely low esteem at the moment. Republican-leaning voters, however, finally appear to be coming home to the GOP. If the current generic ballot numbers hold on Election Night, congressional Republicans may not fare nearly as poorly as many observers expected a few months ago.”

Analysts say Democrats may control the Senate after the November election.

WASHINGTON (CNN) – In the face of an economy in crisis and a deeply unpopular president, some analysts believe the situation is ripe to give Democrats a 60-seat filibuster-proof majority in the Senate in November.

It's "the perfect storm" said Stuart Rothenberg, editor of the nonpartisan Rothenberg Political Report. "You've got Republican voters angry at Republicans, many Americans just petrified about the future…wanting change. And right now change appears to be coming in the form of Democrats."

Of the 35 Senate seats on the line this year, 23 are held by Republicans. Five Republican senators are retiring: Pete Domenici of New Mexico, Wayne Allard of Colorado, John Warner of Virginia, Larry Craig of Idaho and Chuck Hagel of Nebraska.

Democrats control the Senate. Although it's split evenly with 49 Democrats and 49 Republicans, two independents — Bernie Sanders of Vermont and Joe Lieberman of Connecticut — caucus with the Democrats.

Winning a filibuster-proof majority of 60 Senate seats, commonly called the "magic 60," would virtually prevent Republicans from blocking legislation on the Senate floor.

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The House passes bailout.

NEW YORK (CNNMoney.com) – The House on Friday passed a far-reaching and historic plan to bail out the nation's financial system.

The vote for passage of the Senate-amended bill - 263 to 171 - was the result of strong lobbying on the part of the White House and other supporters of the bill all week, following the House defeat of a similar measure on Monday - a defeat that shocked the markets and congressional leaders on both sides of the aisle.

According to preliminary numbers, 172 Democrats voted in favor of the bill while 62 opposed it; and 91 Republicans voted for it and 108 voted against it.

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The bailout bill is causing problems for vulnerable congressmen.

(CNN) — The House of Representatives has yet to officially pass the economic bailout bill, but one member of Congress is already hitting the airwaves to explain to wary voters why he is supporting it.

Related: GOP leaders 'optimistic' about bill

The ad is the first from a member of Congress this cycle to mention the controversial bailout bill, and is a sign of just how politically thorny an issue the legislation is for vulnerable congressmen.

Georgia Rep. Jim Marshall, a Democrat whose re-election bid is among the most competitive House races this election cycle, released a 30-second campaign ad Thursday during which he says, "I don't like this rescue plan any better than you do."

"Warren Buffet calls this financial crisis the worst in the nation’s history," Marshall says in the ad. "I don't like this rescue plan any better than you do, and I'm not interested in bailing out the irresponsible people who dragged us into this credit mess. But I am not going to stand by and let this crisis undermine our economy, and damage the financial future of everyone in America — their jobs, their savings, their dreams."

Marshall is one of the few House Democrats who faces a competitive re-election bid in a year that is clearly favoring his party; his district leans Republican, and like many congressmen his office has been flooded with calls from constituents urging him to vote against the bill.

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The House is expected to vote on the bailout bill Friday

WASHINGTON (CNN) – The House of Representatives is expected to vote Friday on a massive plan to pump government cash into the lending industry, Democratic leadership aides told CNN Wednesday.

The House dramatically rejected an earlier version of the plan on Monday, dealing a stinging defeat to the White House and Congressional leaders, who had spent more than a week negotiating the deal.

Related: Bailout bill gets add-ons to lure votes

The Senate is voting on a new version of the bill on Wednesday, partly in order to increase pressure on the House to pass it.

WASHINGTON (CNN) — Rep. John Boehner, the Republican leader in the House of Representatives, says the chamber will not vote again Monday on a $700 billion plan to bailout the financial services sector, after it was dramatically defeated on the floor.

Watch: 'It's not Wall Street's fault'

The House of Representatives rejected the bailout plan Monday. Watch live coverage on CNN.com/live.

WASHINGTON (CNN) — The House of Representatives Monday rejected a $700 billion plan to bail out the financial system, putting a roadblock in front of the largest government intervention in the market since the Great Depression.

Watch: GOP blames Pelosi

Republicans and Democrats blamed each other for the failure of the bill, which President Bush had urged Congress to approve.

Watch: GOP 'punished the country'

It was intended to reassure financial markets by giving the government the power to buy "illiquid assets" such as bad mortgages.

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A rescue bill was released Sunday evening.

WASHINGTON (CNN) – A draft bill to create a $700 billion bailout of the financial industry was released by members of Congress on Sunday.

House Speaker Nancy Pelosi, D-California said she hopes the bill will be up for a vote Monday.

"We will have to have bipartisanship to pass it," she said.

NEW YORK (CNNMoney.com) — The federal government would provide as much as $700 billion in a far-reaching plan to rescue the nation's troubled financial system, according to a draft of the proposed bill obtained by CNN.

The legislation is still being negotiated and elements of the bill could still change.

The core of the bill is based on Treasury Secretary Henry Paulson's request for authority to purchase troubled assets from financial institutions so banks can resume lending and so the credit markets, now virtually frozen, can begin to operate more normally.

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Nancy Pelosi said 'great progress' has been made on bailout negotiations.

WASHINGTON (CNN) – Congressional negotiators "made great progress" toward reaching a deal on the White House's proposed $700 billion bailout of the financial system, House Speaker Nancy Pelosi said.

Pelosi, flanked by Senate Majority Leader Harry Reid and other congressional leaders, made the announcement around 12:30 a.m. Sunday after a long evening of talks on Capitol Hill.

Their goal has been to craft and announce a final deal on legislation by Sunday, in time for the start of financial markets around the world.

"We have to get it committed to paper so we can formally agree," Pelosi said.

Reid said congressional staffers would be up all night putting the details so a deal could be announced sometime Sunday.

Under the tentative deal being finalized, the rescue program would be overseen by a board including the treasury secretary, secretary of commerce, head of the Securities and Exchange Commission and chairman of the Federal Reserve, said Sen. Kent Conrad, R-North Dakota, who heads the Senate Budget Committee.

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A rainbow appears from the steps of the Capitol.(Eric Marrapodi/CNN)

WASHINGTON (CNN) – The Senate overwhelmingly passed a spending bill Saturday that allows a 26-year ban on offshore oil drilling to expire, subsidizes federal loans for automakers and offers aid to Gulf Coast hurricane disaster victims.

The House already passed the $600 billion stop gap funding bill on Wednesday. The bill, which passed the Senate on a 78-12 vote, will continue government spending at the current level through March 6, 2009.

President Bush is expected to sign the measure.

The end to the ban on oil drilling off the Atlantic and Pacific coasts is a major victory for Republicans. Speeches at the Republican National Convention last month were often interrupted with chants of "Drill, baby, drill."

The ban will be lifted October 1.

Republicans on Capitol Hill have seized on drilling as a major election year issue, citing multiple public opinion polls that show a majority of Americans support more offshore drilling. House Speaker Nancy Pelosi, D-California, had incurred Republican wrath for originally blocking any vote on drilling before allowing a vote on limited drilling earlier this month.

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Sen. Judd Gregg said he expects an agreement by Sunday.

WASHINGTON (CNN) – A New Hampshire senator who is helping negotiate a bailout agreement for the finance sector said Saturday he expects a single proposal to be hammered out by Sunday.

Judd Gregg of New Hampshire said the negotiating team planned to meet late Saturday afternoon.

"Senator (Chris) Dodd and I talked about this a lot and the basic understanding is that when we get in that room as principals we will stay there until we reach an agreement, or if we can't reach an agreement … we'll stay until we've done something" to address the issue "in a comprehensive and
effective way, hopefully," he said.

"The progress we're making is good and I can say with some confidence that we've basically moved this thing down the road a long way toward reaching an agreement," Gregg added.

He and Senate Minority Leader Mitch McConnell of Kentucky appeared together at a news conference where McConnell added, "The goal would be to announce an agreement tomorrow and have the vote on Monday."

NEW YORK (CNNMoney.com) – Negotiators from Capitol Hill and the Bush administration - after working well past midnight - are set to resume talks Saturday over a proposed $700 billion bailout of the financial system.

The talks, which broke at 1:40 a.m., involve staffers from Congress, the Treasury Department and the White House, a senior administration official told CNN.

The exact status of the legislation and the next steps remained unclear, but officials say they face pressure to agree on a bill and vote very soon.

Fewer than a dozen "unresolved issues" remain, a spokesman for a key lawmaker said Saturday.

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Reaction to McCain’s statement fell along party lines.

(CNN) – Democratic leadership reacted to John McCain’s Wednesday announcement that he wants to return to Capitol Hill to work on the economic bailout plan and postpone the first debate by saying “presidential politics” should stay out of the negotiations.

Democrats on the Hill told CNN’s Jessica Yellin that after days of negotiations, they are close to coming to a consensus. If McCain comes back to Washington in the final stretch, they said they fear the Republican nominee may take credit for the deal.

Related: Democrats call McCain move a "stunt"

Senate Majority Leader Harry Reid said with the economy in turmoil, now is the perfect time for the candidates to discuss the issues on the national stage.

“It would not be helpful at this time to have them come back during these negotiations and risk injecting presidential politics into this process or distract important talks about the future of our nation’s economy,” Reid said in a statement. “If that changes, we will call upon them. We need leadership, not a campaign photo op.”

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Sec. Paulson testified before the banking committee Tuesday.

(CNN) — A Democratic congressional leadership source tells CNN that Treasury Secretary Henry Paulson, after talking Monday to Republican nominee John McCain, assured a member of the Senate Democratic leadership that McCain would be "fine," and vote for the bailout package.

But a senior McCain aide still insisted the Arizona senator hasn't decided how he'll vote, and won't until he sees the full and final package. Like Democrats, he is hoping the legislation will include an oversight board and a CEO compensation cap.

The Democratic leadership source said there is concern that with more and more Republicans raising concerns over the package, if McCain would vote against it, it would give other Republicans cover to oppose it as well. If that happens, Democrats would have to provide most of the votes — the last thing the Democratic leadership wants.

Watch: Rep. Barney Frank says Paulson and Bernanke shouldn't be the only ones in charge.

(CNN)—Congressman Barney Frank urged greater oversight on the proposed $700 billion federal government bailout of the banking Industry Monday, saying “people who made bad decisions” shouldn’t be rewarded.

“The notion that while they are getting this help from the federal government we can’t tell them not to have golden parachutes, not to pay millions to some of the very people who made bad decisions as a retirement gift, is unacceptable to us,” Frank told CNN’s John Roberts.

Frank said he admired Secretary Henry Paulson and Chairman Ben Bernanke as capable men, but said “no one two or six individuals ought to have this power.”

Watch: Congressman Barney Frank’s entire interview.

President Bush is urging Congress to pass the rescue plan as is.

NEW YORK (CNNMoney.com) – The Bush administration's proposed $700 billion financial rescue took fuller shape on Monday as lawmakers debated whether to add provisions to protect taxpayers while banks and other companies called for expanding its scope beyond mortgages.

Democrats want the measure to include independent oversight, homeowner protections and limits on executive compensation.

"We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome," House Speaker Nancy Pelosi, D-Calif., said Sunday.

Watch: What's the latest on the bank bailout plan?

Meanwhile, Treasury Secretary Henry Paulson called on Congress to move swiftly. "We need this to be clean and quick," Paulson said.

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WASHINGTON (AP) — The House and Senate reconvene Monday after back-to-back political conventions, both parties eager to use the three-week session to show voters why their candidates are the ones to fix the economy and lower energy prices.

The only matter of business that must be accomplished is passing a bill to keep the government running from October 1 through the November 4 election and until Congress returns.

Even that might not be easy. Republicans are threatening to block the spending bill if Democrats do not give them a vote on ending a quarter-century freeze on new offshore drilling.

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