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Congress was expected to vote this afternoon on the $700 billion financial bailout package, after the contentious bill passed a key test in the House this morning.

The House of Representatives on Monday morning voted 220 to 198 to move the bill forward, the Associated Press reported. A final vote is expected by midday. The Senate is expected to follow later in the week, the AP said.

The legislation, which allows the government to buy up toxic mortgage-related securities clogging up bank balance sheets, will bring the biggest government intervention in the nation's financial markets since the Great Depression, the report noted. President George W. Bush, addressing reporters Monday morning, said he was confident lawmakers would approve the legislation.

"I fully understand that this will be a difficult vote," Bush said according to a transcript of his remarks. "But with the improvements made to this bill, I'm confident that members of both parties will support it. Congress can send a strong signal to markets at home and abroad by passing this bill promptly. Every member of Congress and every American should keep in mind: A vote for this bill is a vote to prevent economic damage to you and your community."

Federal Reserve Chairman Ben Bernanke, in a statement issued Monday morning, praised Congress and the Bush administration for working out an agreement.

"This legislation should help to restore the flow of credit to households and businesses that is essential for economic growth and job creation, while at the same time affording strong and necessary protections for taxpayers," the Fed chairman said.

Bernanke also said the central bank supported "timely actions" taken by the Federal Deposit Insurance Corp. to support "financial and economic stability," a reference to the FDIC's brokering of a deal of Wachovia's (STOCK QUOTE: WB) banking operations to Citigroup ().

Congressional leaders put the finishing touches on legislation over the weekend, after several contentious days of negotiations, according to media reports.

The Treasury and the Federal Reserve had been pressing Congress for more than a week to grant Treasury the authority to relieve banks of soured assets. The plan is aimed at stabilizing the credit markets, which have essentially frozen in recent days, and preventing the financial crisis from claiming more banks and further damaging the broader economy.

Although Treasury Secretary Henry Paulson and Bernanke had asked Congress to quickly approve their request, it became bogged down on Capitol Hill as lawmakers -- at times prodded by angry constituents -- insisted upon more control over the Treasury's spending authority and provisions to protect taxpayers and struggling homeowners.

Talks on the bailout plan broke down late Thursday, partly because of opposition from House Republicans, who had tried to craft an alternative plan that would let banks buy insurance on mortgage-related debt they hold.

The finalized bailout plan reflects lawmakers' insistence on some control over Treasury's spending. The administration would get $250 billion immediately, followed by another $100 billion if the president certified it was required, according to the AP report. The final $350 billion would require a separate certification and be subject to a congressional resolution of disapproval, the report added. The president could veto this resolution, however.

Negotiations made a breakthrough when Democrats agreed to incorporate a Republican demand to have the government insure some debt instead of buying it, the report said.

The plan would prevent participating companies from giving "golden parachutes" to their executives and aims to limit pay packages, the AP report said. Firms that get $300 million or more of help from the program would have to pay heavy taxes on executive compensation of more than $500,000 a year, the report added.

Taxpayers would also get the opportunity to share in the future profits of companies that participate, because the government would receive stock warrants in return for the help, according to the report.

In an effort to help homeowners facing foreclosure, the plan also would require the government to try to rework bad mortgages it acquires so as to lower borrowers' monthly payments, the report added.

The current crisis, which has its roots in the risky mortgages that were liberally issued earlier this decade and the housing boom that they fueled, has shaken the financial system to its foundations. It has claimed storied investment banks Bear Stearns and Lehman Brothers. This week it forced the government to shut down Washington Mutual (STOCK QUOTE: WM) and sell its deposits and assets to JPMorgan Chase (STOCK QUOTE: JPM). Also this week, former investment banks Goldman Sachs (STOCK QUOTE: GS) and Morgan Stanley (STOCK QUOTE: MS) asked to be made into traditional bank holding companies in order to stave off a market attack on their shares.

The success of the rescue of the U.S. financial system probably depends as much on the central banks of China and the Middle East as on Congress and the Federal Reserve, the Wall Street Journal reports.

The U.S. is turning to foreign governments and other overseas investors to buy a good chunk of the $700 billion in Treasury debt expected to finance the bailout. Foreign investors also are needed to shore up the depleted capital of the nation's financial institutions, the Journal reports.