On Friday’s CBS Early Show, correspondent Chip Reid reported on congressional efforts to negotiate a bailout plan for the financial industry and took the Democratic line that Republicans prevented an deal from being reached: "At one point, yesterday, it looked like the $700 billion bailout deal was ready to have the 'I's dotted and the 'T's crossed, but that's when the wild roller coaster ride began and by the end of a tumultuous day, Democrats were blaming John McCain for standing in the way of the deal instead of helping to get it done. The wild ride began Thursday afternoon when a bipartisan group of senators announced the outlines of a bailout deal."

However, since House Republicans were not consulted on such deal "outlines," no real agreement had been made, even so, Reid continued: "Three hours later when John McCain and Barack Obama arrived at the White House for a highly anticipated meeting with the president and congressional leaders, it appeared all they had to do was give the agreement their blessing." Reid later reiterated the idea that a "bipartisan agreement" had been reached: "But as negotiations continued late Thursday night on Capitol Hill, some Democrats accused McCain of souring the negotiations by failing to speak out strongly in support of the bipartisan agreement during the White House meeting."

Following Reid’s report, co-host Maggie Rodriguez interviewed Republican Senator Richard Shelby and Democratic Congressman Barney Frank on the issue. Rodriguez began by asking Shelby why a deal was not made and Shelby explained: "Because I basically believe this Paulson proposal is badly structured...I think if we adopt the Paulson plan, or something close to it, we're making a big mistake." Rodriguez then turned to Frank and tossed a softball: "But wasn't the idea to get together yesterday and reach a compromise and, Congressman Frank, hadn't you, in fact, reached a compromise that fell apart? What happened?" That gave Frank the opportunity to declare: "Well, many of us had. I guess -- I signed on for a lot of jobs, I didn't know I was going to be the referee of the internal Republican ideological civil war."

Frank went on to accuse Republicans of an "ambush": "To our surprise yesterday, the House Republicans come up with their own entirely new plan. And it is an ambush plan." Rodriguez then followed Frank’s lead and asked Shelby: "Is this an ambush? And who are you looking to for leadership here? Are you looking to your president or are you looking to John McCain, Senator Shelby?" Shelby replied by suggesting that more time was needed to debate the legislation, but a panicked Rodriguez worried: "Do we have time, Senator? Do we have time?...What if the markets crash? Look at WAMU [Washington Mutual] failing today."

Here is the full transcript of the segment:

7:00AM TEASER:

HARRY SMITH: The economy in peril and politicians blaming each other.

HARRY REID: John McCain did nothing to help. He only hurt the process.

SMITH: Who's responsible and what does it mean to your wallet?

7:01AM SEGMENT:

MAGGIE RODRIGUEZ: But first, the bailout battle in Washington. Right now there is no deal and negotiators will try again today. Some of them blame the delay on presidential politics. CBS News Capitol Hill correspondent Chip Reid is in Washington. Chip, good morning.

CHIP REID: Well, good morning, Maggie. At one point, yesterday, it looked like the $700 billion bailout deal was ready to have the 'I's dotted and the 'T's crossed, but that's when the wild roller coaster ride began and by the end of a tumultuous day, Democrats were blaming John McCain for standing in the way of the deal instead of helping to get it done. The wild ride began Thursday afternoon when a bipartisan group of senators announced the outlines of a bailout deal.

CHRIS DODD: We've reached a fundamental agreement on a set of principles.

REID: Three hours later when John McCain and Barack Obama arrived at the White House for a highly anticipated meeting with the president and congressional leaders, it appeared all they had to do was give the agreement their blessing.

GEORGE W. BUSH: My hope is that we can reach an agreement very shortly.

REID: But it quickly became clear just how shaky the deal was, when Republican Senator Richard Shelby emerged from the White House.

RICHARD SHELBY: That agreement is, obviously -- well, no agreement.

REID: And it's not just Shelby. A number of conservative Republicans say they want a free market solution, not a government bailout.

ERIC CANTOR: We have been willing, and are willing to sit down and talk about the plan that does not leave the taxpayers with -- hanging with the bill.

REID: John McCain assured Katie Couric on the 'CBS Evening News' that, in the end, most Republicans will support the deal.

JOHN MCCAIN: I am confident that we will reach a agreement that gets a majority of my colleagues on my side of the aisle.

REID: But as negotiations continued late Thursday night on Capitol Hill, some Democrats accused McCain of souring the negotiations by failing to speak out strongly in support of the bipartisan agreement during the White House meeting.

BARNEY FRANK: I think this was a campaign ploy for Senator McCain.

HARRY REID: John McCain did nothing to help. He only hurt the process.

CHIP REID: Barack Obama didn't directly attack McCain, but he did suggest that McCain's surprising decision to suspend his campaign to help get a deal may have backfired.

BARACK OBAMA: What I found, and I think was confirmed today, is that when you inject presidential politics into delicate negotiations, it's not necessarily as helpful as it needs to be.

REID: So now the negotiations are at an impasse. And in fact, that meeting at the White House went so badly, that the Associated Press reports Secretary Paulson went in to meet with the Democrats afterward and actually got down on one knee to plead with them not to reveal how badly it had gone. As for the debate down there in Oxford, Mississippi. Obama plans to be there. McCain has not yet made up his mind. Maggie.

RODRIGUEZ: A lot of question marks this morning. CBS's Chip Reid, thank you. Joining us from Capitol Hill this morning are Senator Richard Shelby, the top Republican on the Senate Banking Committee, and Congressman Barney Frank, who's Chairman of the House Financial Services Committee. Gentlemen, good morning.

RICHARD SHELBY: Good morning.

BARNEY FRANK: Good morning.

RODRIGUEZ: Here we are with another casualty in this financial crisis. We have the biggest bank failure in U.S. history and even though the people who we elected to guide us in times like these spent all day yesterday, and all night, meeting to try to come up with a solution. We don't have one. So let's start with you, Senator Shelby, why not?

SHELBY: Because I basically believe this Paulson proposal is badly structured. It does nothing, basically, for the stressed mortgage payer. It does a lot for three or four, five banks, including foreign banks, and I have with me, right here, over -- a list of over 200 of the top economists in this country that say this structure, the Paulson plan, is a bad plan, we need to do something to put liquidity in the market, we need to consider this. I brought this up yesterday. I think if we adopt the Paulson plan, or something close to it, we're making a big mistake.

RODRIGUEZ: But wasn't the idea to get together yesterday and reach a compromise and, Congressman Frank, hadn't you, in fact, reached a compromise that fell apart? What happened?

BARNEY FRANK: Well, many of us had. I guess -- I signed on for a lot of jobs, I didn't know I was going to be the referee of the internal Republican ideological civil war. Look, you could have designed, in the abstract, a better plan. But when you have a party in power, President Bush's people, and his top economic advisers, the head of the Federal Reserve and the secretary of Treasury say, 'look, we're going to have a crisis if you don't do this quickly.' By the way, even if that hadn't been true and I think it probably was, they make it true, because if you reject the president's top economic advisers you do undermine confidence. You know, some of the points Senator Shelby made, we were also making. We wanted to amend the bill, and part of the agreement we reached yesterday among some members of Congress was to provide some real relief to mortgage holders. I'd like to further amend the bankruptcy law to do that and that's a Democratic position and we're still fighting over it. We want to curb some of the extreme authority the secretary has. We want to put some language in there to protect the taxpayers, but we did feel we had to negotiate within this framework.

RODRIGUEZ: Right.

FRANK: To our surprise yesterday, the House Republicans come up with their own entirely new plan. And it is an ambush plan. On Wednesday, Secretary Paulson and Chairman Bernanke testified before the House Financial Services Committee. None of the Republicans now backing this new plan even mentioned it to him because they knew he was going to say it wouldn't work.

RODRIGUEZ: Okay so -- so let me interrupt you in the essence of time and get Senator Shelby's response to that. Is this an ambush? And who are you looking to for leadership here? Are you looking to your president or are you looking to John McCain, Senator Shelby?

SHELBY: Well, I'm not looking to either one. I'm looking at this -- these economists that know a lot more about the economy than Senator McCain, Senator Obama, President Bush, me, and anybody else that I know of. And they say we need to take some time. I don't mean a lot of time. And look at another structure or plan. I believe they're right.

RODRIGUEZ: Do we have time, Senator? Do we have time?

SHELBY: We have the time, absolutely.

RODRIGUEZ: What if the markets crash? Look at WAMU failing today.

SHELBY: Well, let's say that we did nothing. The markets will correct themselves. It might be better than putting a trillion dollars worth of debt on our children.

FRANK: Well, I would have to disagree there, we are not-

RODRIGUEZ: Congressman Frank let me just -- let me-

FRANK: We're not putting a trillion dollars-

RODRIGUEZ: Just-

FRANK: Well, I have to correct a serious misstatement. This isn't going to cost a trillion. It will cost some money, but most of this will be paid back. And we can scare people by falsely claiming this will cost a trillion. I disagree a lot with the Bush Administration, but they're not asking for a trillion to be at risk, maybe 10% of that, now that's a lot of money, but we ought to have the right numbers.

RODRIGUEZ: Okay-

SHELBY: If we get out of this for a trillion dollars it'll surprise everybody.

FRANK: That's demagoguery.

RODRIGUEZ: I literally have time for a yes or a no from each of you and I think it's an important question. So let me ask you Senator Shelby, do we have a solution by the end of the weekend? Yes or no?

SHELBY: We could, but I think we'll have to change the structure some.

RODRIGUEZ: I'll take that as a no. And Congressman Frank?

FRANK: It depends on the House Republicans dropping this revolt against the president and cooperating and trying to amend the plan. And at this point, I can't give you a yes or no because it's up to the House Republicans and their war, I think on behalf of Senator McCain, with President Bush.

RODRIGUEZ: Alright. Looks like we're leaning towards no. Gentlemen, thank you both for your time.

SHELBY: Thank you.

—Kyle Drennen is a news analyst at the Media Research Center.