At a time when GOP support for an administration-backed bailout package seemed to be unraveling, House conservatives on Tuesday further fractured their party by unveiling their own proposal.

Members of the Republican Study Committee raised several concerns with the $700 billion plan being pushed by Treasury Secretary Henry Paulson. Specifically, they charged that the plan doesn’t ensure taxpayers will get their money back and say it could fundamentally alter the role of government in the free enterprise system.

“We are highly skeptical of the Paulson plan and believe that the time has come for Congress to rationally debate alternatives,” said Rep. Jeb Hensarling (Texas), chairman of the Republican Study Committee.

Hensarling said he was not personally criticizing Paulson or President Bush for their proposal, but called their approach to resolving the financial market meltdown “a particularly lousy option.”

The RSC plan would suspend the capital gains tax; privatize Fannie Mae and Freddie Mac, which Hensarling described as “financial Frankensteins created in a government laboratory”; and refocus the Federal Reserve on long-term price stability.

The RSC chairman said conservatives would also support setting strict limits on CEO compensation.

“While we certainly don’t want Congress to set compensation limits in the free enterprise system, if the government ends up socializing some losses, it will have to socialize some profits as well,” Hensarling said.

Rep. Joe Barton (R-Texas) said most people don’t know what is in the Treasury plan and need more time review it, along with other alternatives. He said he would support offsetting the costs of any bailout bill by expanding offshore and Arctic drilling.

Rep. Mike Pence (R-Ind.) questioned why administration officials are pressuring Congress to pass the proposal without reviewing it.

“Act now? The last time I heard that was on a used-car lot,” Pence said. “It usually means they’re going to get the better end of the deal.”

Democratic leaders called on the president to get Republicans in line with passing the administration’s rescue bill.

“I caution the president that we cannot pass this package without his party’s support,” Majority Whip James Clyburn (D-S.C.) said.

“If it’s a crisis, as Secretary Paulson and [Fed] Chairman [Ben] Bernanke argue, and we all need to come together, then as leader of this nation, the president needs to take the lead and bring the country together behind his plan. He must make a case to Congressional Republicans and to the American people that his $700 billion rescue package is the right solution,” Clyburn said.

Democratic Caucus Chairman Rahm Emanuel (Ill.) added, “An economy in crisis cannot be led by a silent president.”