WASHINGTON (AP) - President Bush on Wednesday warned Americans and lawmakers reluctant to pass a $700 billion financial rescue plan that failing to act fast risks wiping out retirement savings,
rising foreclosures, lost jobs and closed businesses. "Our entire
economy is in danger," he said.
His dire warning came not long after the president issued
extraordinary invitations to presidential candidates Barack Obama
and John McCain, one of whom will inherit the mess in four months,
as well as key congressional leaders to a White House meeting on
Thursday to work on a compromise.
"Without immediate action by Congress, American could slip into
a financial panic and a distressing scenario would unfold," Bush
said in a 12-minute prime-time address from the White House East
Room that he hoped would help rescue his tough-sell bailout
Bush explicitly endorsed several of the changes that have been
demanded in recent days from the right and left. But he warned that
he would draw the line at regulations he determined would hamper
"It should be enacted as soon as possible," the president
The bailout, which the Bush administration asked Congress last
weekend to approve before it adjourns, is meeting with deep
skepticism, especially from conservatives in Bush's own party who
are revolting at the high price tag and unprecedented
private-sector intervention. Though there is general agreement that
something must be done to address the spiraling economic problems,
the timing and even the size of the package remained in doubt and
the administration has been forced to accept changes almost daily.
Seeking to explain himself to conservatives, Bush stressed he
was reluctant to put taxpayer money on the line to help businesses
that had made bad decisions and that the rescue is not aimed at
saving individual companies. He tried to address some of the major
complaints from Democrats by promising that CEOs of failed
companies won't be rewarded.
"With the situation becoming more precarious by the day, I
faced a choice: to step in with dramatic government action or to
stand back and allow the irresponsible actions by some to undermine
the financial security of all," Bush said. "These are not normal
The president turned himself into an economics professor for
much of the address, tracing the origins of the problem back a
decade to a large influx of money into the U.S. system from
overseas, low interest rates, the "faulty assumption" that home
values would continue to skyrocket, easy lending by mortgage
companies, over-borrowing by home owners and exuberant building by
But while generally acknowledging risky and poorly thought-out
financial decisions at many levels of society, Bush never assigned
blame to any specific entity, such as his administration, the
quasi-indepedent mortgage giants Fannie Mae and Freddie Mac, or the
Wall Street firms that built rising profits on increasingly
speculative mortgage-backed securities. Instead, he spoke in terms
of investment banks that "found themselves saddled with" toxic
assets and banks that "found themselves" with questionable
Intensive, personal wheeling and dealing is not usually Bush's
style as president, unlike some predecessors. He does not often
call or meet with individual lawmakers to push a legislative
But with the nation facing the biggest financial meltdown in
decades, Bush took the unusual step of calling Democrat Obama
personally about the meeting, said presidential spokeswoman Dana
Perino. White House aides extended the invitations to Republican
McCain and to GOP and Democratic leaders from Capitol Hill.
Obama spokesman Bill Burton said the senator would attend and
"will continue to work in a bipartisan spirit and do whatever is
necessary to come up with a final solution." Senior McCain
advisers said McCain will attend, too. The plans of the other
invitees were unknown, and the exact details of the meeting, which
Perino said was aimed at making fast progress to stem the biggest
financial meltdown in decades, were still being set.
In another move welcome at the White House, Obama and McCain
issued a joint statement urging lawmakers - in dire terms - to act.
"Now is a time to come together Democrats and Republicans in a
spirit of cooperation for the sake of the American people," it
said. "The plan that has been submitted to Congress by the Bush
administration is flawed, but the effort to protect the American
economy must not fail."
The two candidates - bitterly fighting each other for the White
House but coming together over this issue - said the situation
offers a chance for politicians to prove Washington's worth.
"This is a time to rise above politics for the good of the
country. We cannot risk an economic catastrophe," they said.
However, the Oval Office rivals were not putting politics aside
entirely. McCain asked Obama to agree to delay their first debate,
scheduled for Friday, to deal with the meltdown. Obama said the
debate should go ahead.
Bush last gave a prime-time address to the nation 377 days ago,
on Iraq. This one, carried live by all five major television
outlets, could be the last of his presidency.
White House and administration officials have warned repeatedly
of a coming "financial calamity."
But that has not closed the deal, which for many recalls
previous warnings of grave threats from Bush - such as before the
Iraq war - that did not materialize. So Bush's goal with his speech
was to frame the debate in layman's terms to show the depths of the
crisis, explain how it affects the people's daily lives and inspire
the public to demand action from Washington.
He said that more banks could fail, the stock market could
plummet and erase retirement accounts, businesses could find it
hard to get credit and be forced to close, wiping out jobs for
millions of Americans.
"Ultimately, our country could experience a long and painful
recession," Bush said. "Fellow citizens, we must not let this
But he ended on a positive note, predicting lawmakers would
"rise to the occasion" and that the nation's economy will
overcome "a moment of great challenge."
Through the crisis, the White House has struggled over how to
As the problem mushroomed over the weekend of Sept. 13, Bush
generally stayed out of the limelight, letting Treasury Secretary
Henry Paulson and Federal Reserve Chairman Ben Bernanke take the
lead with reporters, lawmakers and the public. Bush remained silent
Since last Thursday, however, the president has talked about the
crisis almost daily, although usually briefly, and yet he still has
had trouble breaking into the debate. News coverage has barely
mentioned Bush's comments.
The decision to pull out perhaps a president's largest available
weapon - the ability to demand a presence on evening television
screens nationwide, from a setting with the ultimate bully-pulpit
power - is one sign that the rescue package still faced daunting
With so many crises hitting the United States at once, the
presidential race has taken a back seat and so has Bush's
involvement in politics. Bush canceled a fundraising trip to
Florida on Wednesday to deal with the problem, the third time in a
week that he has scrapped his attendance at out-of-town
fundraisers, either because of the market turmoil or Hurricane Ike.
The economic crisis also is almost certain to overshadow the
rest of Bush's four months left in office and could hugely impact
his legacy. It has been assumed that the long-term view of Bush's
presidency was to be shaped largely by Iraq, Hurricane Katrina and
the Sept. 11, 2001, attacks. Now, the dire economic problems and
the aftermath of the government's attempted solution will certainly
be added to that list.
(Copyright 2008 by The Associated Press. All Rights Reserved.)