WASHINGTON -- After a week of political tumult and deepening economic anxiety, congressional leaders yesterday reached agreement on a historic proposal that would grant the government vast new powers over Wall Street and offer fresh help to homeowners at risk of foreclosure.

The proposed legislation would authorize Treasury Secretary Henry Paulson to initiate what is likely to become the biggest government bailout in U.S. history, allowing him to spend up to $700 billion to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates.

The plan would give Mr. Paulson broad latitude to purchase any assets from any firms at any price and to assemble a team of individuals and institutions to manage them. In wielding those powers, Mr. Paulson and others hope to contain a crisis that already has caused the failure or forced the rescue of a half-dozen major Wall Street firms and unnerved markets around the world.

Forged after a marathon negotiating session between lawmakers from both parties and Mr. Paulson -- who at one point appeared to negotiators to be on the verge of collapse -- the measure is expected to be put to a vote today in the House. Many restive Republican lawmakers, who had originally criticized the package as putting taxpayers at risk and violating free-market principles, appeared to be dropping their opposition.

After gaining a key concession on a plan to limit taxpayer exposure, House Minority Leader John Boehner, R-Ohio, emerged last night from a meeting of House Republicans to say he is "encouraging every member whose conscience will allow them to support this."

A vote in the Senate could follow as soon as Wednesday.

President Bush last night released a statement praising the measure. Although it has been panned as a massive bailout for Wall Street financiers, Mr. Bush argued the bill would have broad benefits for ordinary families and business owners who need "access to credit" to "make purchases, ship goods, and meet their payrolls."

Both presidential candidates, Sen. John McCain of Arizona, the Republican nominee, and Sen. Barack Obama of Illinois, the Democratic candidate, gave guarded endorsements of the bailout plan. Both Mr. McCain and Mr. Obama had dipped into the negotiations during a contentious White House meeting on Thursday.

Mr. Bush has stressed that the ultimate cost of the bailout would be much less than $700 billion because the government would eventually sell the assets it purchases and recover most, if not all, of its investment.

Still, he acknowledged yesterday that the measure presents lawmakers with "a difficult vote" barely a month before the November elections. Polls show the bailout is hugely unpopular, and lawmakers have been inundated with calls and e-mails from angry constituents. With investors hanging on every twist of the debate in Washington, leaders in both chambers predicted that the bill will pass.

"If we do this and it works right, it's most likely that people will never appreciate how close we came to the brink. So there's not much political upside to this," said Sen. Judd Gregg, R-N.H., the lead negotiator for Senate Republicans. But lawmakers are ready to support the bill, Mr. Gregg said, because they know "we are facing a crisis of proportions that are almost incomprehensible."

Mr. Gregg and other lawmakers were stunned 11 days ago after a late-night meeting in the U.S. Capitol with Mr. Paulson and Federal Reserve Chairman Ben Bernanke, who warned that an imminent meltdown in financial markets threatened to destroy the wealth and jobs of millions of Americans. Two days later, Mr. Paulson presented lawmakers with a three-page rescue plan.

By yesterday, the measure had grown to 110 pages, many of them devoted to the creation of myriad oversight agencies, including an independent inspector general and a Financial Stability Oversight Board composed of top officials from regulatory agencies, as well as the Treasury, the Fed and the Department of Housing and Urban Development.

Still, the measure would give Mr. Paulson broad authority to create an Office of Financial Stability within the Treasury, to hire its staff and to direct their activities. The head of the office would be subject to Senate confirmation and would be required to quickly publish guidelines for identifying, pricing and purchasing troubled assets.

Money for the program would be released in segments, with the Treasury secretary receiving $250 billion immediately, $100 billion upon presidential certification of its necessity, and the final $350 billion after Congress is given 15 days to object. Mr. Paulson has said he expects to spend about $50 billion a month on the program.

The bill also requires Mr. Paulson to establish a bank-funded federal insurance program that would protect firms against loss from troubled assets. The Treasury secretary's power to purchase assets would end on Dec. 31, 2009, although the next administration could seek a one-year extension. The assets could be held indefinitely and sold when the housing market recovers, theoretically for a profit.

To protect taxpayers, participating firms would be required to give the government warrants to buy stock so taxpayers could benefit if they return to profitability. If the government does not regain all of its money after five years, the president would be required to submit a plan for recovering the money.

The measure would require Treasury, as the new owner of securities backed by thousands of mortgages, to work with banks to modify the most troubled of those loans, in part by forgiving outstanding debt and helping distressed borrowers avoid foreclosure and stay in their homes.

The measure also would require federal officials to rein in excessive compensation for corporate executives, a long-time Democratic priority. "The party is over. The era of golden parachutes for high-flying Wall Street operators is over," House Speaker Nancy Pelosi, D-Calif., said yesterday. "No longer will the U.S. taxpayer bail out the recklessness of Wall Street."