Republican negotiator Judd Gregg said on Sunday: "What we face in the credit markets is a potential fiscal crsis of proportions that we have never seen before.
"This is about the very fabric of American life."
Gregg, a member of the Senate Budget Committee, said the US congress is expected to vote on the deal on Monday.
He said: "We have given the [treasury] secretary the authority, the resources and the flexibilty to go forward and free up the credit markets.
"This is a good product and a critical product - the downside of not doing this is potentially such a catastrophe for this nation that I don't even want to think about it," he said.
22 per cent support the bail-out plan
56 per cent support an alternative bail-out plan
11 per cent want no action
Source: USA Today/ Gallup Poll
His announcement came after US Democrat and Republican legislators held talks over the weekend in an attempt to reach a deal so they could vote on the legislation before stock markets reopened on Monday.
Senator Harry Reid said: "It's very clear that Americans have some reason to be concerned and even angry about where we find ourselves.
"We know that there has been greed on Wall Street and it has been exacerbated significantly during the last eight years because they've had no oversight.
"Regulations have been uninforced and it has created the situation that we now find ourselves."
'Shortfall to be collected'
Barney Frank, the chairman of the senate banking committee, said: "This will be the first time in the history of the United States that anything has been done by Congress to curtail excessive CEO compensation.
"The absence of regulation is at the root of this crisis. It would be irresponsible of us to take this action and not be committed, as we all are, to preventing it from reoccurring.
"There is a recognition in this bill that if there is a shortfall in the amount of money collected as we sell the assets, it should be made up, not by the general taxpayers, but by the financial institutions and the industries that have benefitted.
"At the end of five years, the president must send a proposal for us to collect that shortfall from the institutions and industries that benefitted."
Rosiland Jordan, Al Jazeera's correspondent on Capitol Hill, said: "What we just heard from Judd Gregg is that whatever the assets are right now the US would be buying them at "fire sale" prices - practically getting them for nothing.
|Bush told Americans that he understood their frustration [AFP]
"So, regardless of how long it takes for the economy to stabilise and start rebounding, it is assumed, according to senator Gregg, that the US government will make money on this deal [or] at least get back the money that they put into these institutions when they transferred their toxic debt to the government.
"So it is assumed that there is an upside for the US treasury and, by extension, the US taxpayer."
"We've made great progress," Nancy Pelosi, speaker of the House of Representatives, said earlier on Sunday.
Henry Paulson, the US treasury secretary, who under the rescue plan would have unprecedent powers to use taxpayers' money to buy up bad debt, said: "I think we're there."
"We've been working very hard on this ... And we've made great progress toward a deal, which will work and will be effective in the marketplace, and, you know, effective for all Americans."
The rescue plan for troubled financial institutions, proposed by the US administration, has proved a hard sell, both to Democrats and members of Bush's Republican party.
Several polls this week showed many Americans were sceptical of the package backed by Bush.
In one poll, 55 per cent of people said they did not believe the government should be responsible for bailing out private companies with taxpayers' money, even if the collapse could damage the economy.
Bob Corker, a Republican senator for Tennessee, who serves on the Senate Banking Committee, said congressmen were encountering extraordinary voter anger.
Referring to his own senate office, he said, "We had, I'm going to guess, 3,500 calls this week about this particular issue. I've had 95 calls in support of it if that gives you any indication."
Both Democrats and Republicans have expressed disquiet that so much money from taxpayers would go to private companies.
The entire House of Representatives and one-third of the senate are facing re-election on November 4.