Sept. 23 (Bloomberg) -- Congressional leaders in both parties are struggling to find support among House lawmakers for a $700 billion rescue plan for troubled financial firms pushed by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke.

Congressional testimony today by Bernanke and Paulson and a visit to Capitol Hill by Vice President Dick Cheney may not have persuaded a majority of either party to back the rescue plan, lawmakers said.

``Hardly anyone in that room has decided yet how they're going to vote on this,'' Representative Phil Gingrey, a Georgia Republican, said after Republicans met with Cheney.

Whether a majority of Democrats will support it is ``up in the air right now,'' said Representative Chris Van Hollen of Maryland, chairman of the Democratic Congressional Campaign Committee.

House Republican and Democratic leaders have endorsed quick action on the plan to allow the Treasury to purchase troubled investments in order to prevent further economic turmoil.

House Speaker Nancy Pelosi said progress is being made between House Financial Services Committee Chairman Barney Frank and Paulson on a compromise that could bolster oversight of Treasury's expanded authority and limit compensation of executives of companies that get government aid.

Move Legislation

House Majority Leader Steny Hoyer said Democratic leaders still are aiming to move the legislation this week.

Hoyer said the final measure will include a cap on executive pay. The Bush administration, which has resisted that idea, is likely to go along with it in the end, Hoyer said.

Republican leaders said the action is necessary to shore up the banking system.

``This is a Main Street problem,'' said House Republican Whip Roy Blunt of Missouri. ``This is a systemic solution going to the root of the problem.''

Many lawmakers said they weren't convinced.

``I am very uneasy with the proposal to spend a trillion dollars to buy illiquid assets, toxic securities from large financial institutions and have the taxpayers pay for that,'' said Representative Spencer Bachus, the top Republican on the House Financial Services Committee.

``There is growing discontent among Republicans, that was very evident,'' said Representative Mike Pence of Indiana, a member of a self-described conservative group of more than 100 House Republicans.

`Anxiety'

Representative John Yarmuth, a Kentucky Democrat, said Democratic leaders may give lawmakers more time to consider the issue.

``There is a lot of anxiety that we're being pressured into making a decision that should take more time,'' Yarmuth said.

Bernanke, in testimony today, said failing to intervene in the financial markets will spread the economic pain throughout the nation.

``I believe if the credit markets are not functioning, that jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon, GDP will contract, that the economy will just not be able to recover,'' Bernanke told the Senate Banking Committee today. ``My interest is solely for the strength and recovery of the U.S. economy.''

Senator Christopher Dodd of Connecticut, after listening to Bernanke and Paulson testify at the Senate Banking Committee he heads, said Democrats would demand changes to the plan.

`Not Acceptable'

``What they sent us is not acceptable,'' Dodd told reporters. ``All of us have serious questions.''

Senate Majority Leader Harry Reid, a Nevada Democrat, expressed concern that congressional Republicans are backing away from a plan formulated by their own party. ``We need now for the Republicans to start producing some votes for this,'' said Reid.

Senate Republicans said the Bush administration needs to sell the proposal better to address voters' concerns about the cost and the value of the asset buyout program.

``As long as this is portrayed as a bailout for Wall Street it's a loser,'' said Texas Senator John Cornyn. It's important for proponents to ``explain why it's important for working families in the country.''

Senator Charles Schumer, a New York Democrat, said he supports reducing the burden on taxpayers by ``looking at passing only a first installment, and by considering an FDIC-style setup for financial institutions to defray some of the costs.''

Reservations

At a meeting this morning, Cheney appealed to Republicans in Congress to put aside their reservations and support the plan.

Cheney urged action on the proposal this week and warned of a dire impact on financial markets if action isn't swift. Gingrey said the financial system was described as being in ``gridlock,'' with institutions unwilling to make loans.

``They said we really only have days and not weeks to do something big and bold,'' said Representative Zach Wamp, a Tennessee Republican.

Republicans are wary of giving Paulson far-reaching new financial power, Gingrey said, given the administration's inability to find the weapons of mass destruction it said were in Iraq, and its much-criticized response to Hurricane Katrina.

To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net; Christopher Stern in Washington at Cstern3@bloomberg.net

Last Updated: September 23, 2008 16:57 EDT