WASHINGTON — The Bush administration last night signaled its willingness to give taxpayers an ownership stake in companies aided by its bailout of the financial system — another of the concessions that have brightened prospects for swift congressional action on the $700-billion federal rescue plan.

“This process is well under way now. It’s picked up momentum,” Sen. Jack Reed said last night after Treasury Secretary Henry Paulson held a closed-door session in the Capitol with Senate Democrats.

The Rhode Island Democrat said Paulson — the administration’s point man on the bailout — specifically mentioned Reed’s proposal for stock ownership “warrants” as he ticked off the list of congressional demands that he intends to accommodate in a compromise federal rescue package.

The administration’s other big concessions since it unveiled the bailout at the beginning of the week are: curbs on so-called “golden parachutes” and other forms of pay for the executives of companies assisted in the bailout, and an independent structure to supervise the Treasury’s exercise of the powers it is to be granted to conduct the market rescue.

“The initial proposal by the Treasury was stunning in its size, its lack of detail and its allocation of great power to the secretary,” Reed said. Since then, Paulson, Federal Reserve Chairman Ben Bernanke and other top regulators have sat through exhaustive — and sometimes combative — public hearings in the Senate and House. Meanwhile, offstage talks have proceeded among the House, Senate and administration negotiators. “My sense is that they have now come from this sort of conceptual framework to the detailed task of writing this legislation,” Reed said.

As a senior Democrat on the Senate Banking Committee, Reed has been pushing the proposal to require companies to give the government warrants for eventual ownership shares as a condition of selling the government their bad debts. He has portrayed the plan as a fair way to compensate taxpayers for the risk of bailing out companies that may one day become profitable again.

Reed said tough issues remain to be solved, top among them the call by many in Congress for the bailout bill to direct assistance to homeowners faced with mortgage foreclosure. But he said the talks “have moved to the stage of ‘How do we do this thing?’ ” Completion of a draft package by the weekend is not out of the question, Reed said.

Earlier yesterday, Democratic Sen. Sheldon Whitehouse applauded the Treasury’s effort’s “to restore stability and confidence in financial markets.” He reiterated his call for the bailout bill to help homeowners struggling with adverse mortgage terms — possibly through revision of the bankruptcy laws.

Representatives Patrick J. Kennedy and James R. Langevin, both Democrats, said that they are striving to strike a balance between the urgent need for a federal rescue of the nation’s financial system and their insistence on putting taxpayer protections into the legislation.

“I recognize the need for action to prevent a complete economic collapse,” Langevin said, echoing the view of many colleagues on both sides of the aisle. “There is a need to move with speed, but I also agree with the idea of slowing this thing way down in order to get it right.”

Kennedy said, “We’ve got a market situation that demands a response. The crisis at hand demands action,” because the tremors on Wall Street have such great potential to harm the financial situation of average citizens.

But Kennedy also said it is essential for Congress to resist a rush to enact a flawed rescue package.

Both Rhode Island congressmen endorsed the administration’s signals that it could accept requirements for mechanisms to supervise the workings of the bailout, as well as restrictions on “golden parachutes.” Paulson’s movement toward such compromises is a mark of progress, Langevin said.

Whitehouse, Langevin and Kennedy have all endorsed the warrants for taypayer ownership of shares in bailed out companies.

jmulligan@belo-dc.com