Bush Urges Congress to Enact Rescue Package
Friday, September 19, 2008; 3:29 PM
President Bush, warning that urgent steps are needed to "to preserve America's financial system," asked Congress today to put aside partisan differences and enact a historic rescue package now being finalized by his administration.
In remarkably grim language for a president known for his economic optimism, Bush defended the federal government's "targeted measures" in recent weeks to shore up collapsing credit markets, but said there is now an "urgent need" for even broader government intervention.
"This is a pivotal time for America's economy," Bush said at the start of a nine-minute address in the White House Rose Garden. "We must act now to protect our nation's economic health from serious risk."
Bush also shot back at growing criticism of the administration's role in the meltdown from Capitol Hill and both major presidential campaigns.
"There will be ample time to debate the origins of this problem," Bush said after listing some of the key developments that have rocked global markets in recent days and weeks. "Now is the time to solve it."
Bush, who portrays himself as a conservative free-market advocate, also defended steps that have put billions of taxpayer dollars at risk. "Government intervention is not only warranted; it is essential," he said.
Flanked by Treasury Secretary Henry M. Paulson Jr., Federal Reserve Chairman Ben S. Bernanke and Securities and Exchange Commission head Christopher Cox, Bush offered an unusually negative assessment of the widening financial crisis that has taken hold during his final year in office. Focused until recently on emphasizing the inherent strengths of the U.S. economy, Bush acknowledged in stark language that his administration's rescue plans "require us to put a significant amount of taxpayer dollars on the line."
Late this morning, Bernanke and Paulson convened a conference call to brief more than 100 House Republicans on their plans, with the two administration officials speaking to the group for 45 minutes. According to one participant in the call, Bernanke and Paulson laid out a "strong and serious" case for how dire the financial situation is. However, the participant said, the duo were "vague in detail" and left many skeptics among the Republicans, who have grown increasingly frustrated with the administration's departure from free-market principles and soaring costs to taxpayers.
House Minority Leader John A. Boehner (R-Ohio) acted as the chief congressional backer for Bernanke and Paulson, indicating his support for "no cap" on the amount of funds available in the rescue plan, according to the participant, who requested anonymity to speak freely about internal party discussions.
House Republicans remained on the conference call for an additional 45 minutes after Bernanke and Paulson left it, discussing the range of options available and how best to limit taxpayer exposure.
Bush's appearance today marked his third and most extensive statement on the economy during a week that began with the bankruptcy of Lehman Brothers and an $85 billion federal rescue of insurer American International Group.
The administration followed up today by moving to safeguard assets in money-market mutual funds and temporarily banning the short selling of financial company stocks. In an effort to shore up money-market funds, which hold an estimated $3.5 trillion, Bush authorized the Treasury Department to use up to $50 billion from a Depression-era account to offer insurance similar to that provided by the Federal Deposit Insurance Corp. for cash accounts in banks.