Bush Urges Congress to Enact Rescue Package

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Bush: Economy Stable Despite Financial Crisis

President Bush said Friday that his administration is taking 'unprecedented action' to deal with the ailing financial markets.

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Paulson announced late Thursday that the administration was assembling a proposal for a broader market rescue fund using government money and requiring congressional approval.

Bush characterized the wave of bankruptcies, bailouts and stock market plunges as rooted in the collapse of the housing market and a resulting loss in confidence.

"We must address the root cause behind much of the instability in our markets: mortgage assets that have lost value during the housing decline and are now restricting the flow of credit," Bush said. He said there is an "urgent need for Congress to pass legislation approving the federal government's purchase of illiquid assets, such as troubled mortgages, from banks and other financial institutions," adding: "This is a decisive step that will address underlying problems in our financial system."

But, citing U.S. productivity and foreign demand for American goods, he also offered at least a glimmer of optimism for long-term recovery.

"In the long run, Americans have good reason to be confident in our economic strength," Bush said. "We have a flexible and resilient system that absorbs challenges and makes corrections and bounces back. . . . We will weather this challenge, too, and we must do so together. This is no time for partisanship. We must join to move urgently needed legislation as quickly as possible without adding controversial provisions that could delay action."

The president, who has not answered a public query from reporter since Aug. 6, took no questions after the speech and walked back into the White House with his advisers.

White House press secretary Dana Perino fired back today at criticism from Democrats and some Republicans that Bush has not taken enough of a leadership role during the crisis.

"Just because the president isn't addressing the media in every single news cycle does not mean he is not leading," Perino said.

In a statement issued before Bush spoke, Democratic presidential candidate Barack Obama said he supports the efforts of Paulson and Bernanke to work with Congress on finding "a systemic solution to our deepening crisis." The senator from Illinois said events in recent days "have made it clear that we must take further bold and decisive action to shore up confidence in our financial markets and avoid a deepening economic crisis that could jeopardize the life savings and well-being of millions of Americans."

In a news conference in Coral Gables, Fla., Obama later elaborated on four principles he said must guide a plan to solve the financial crisis. He said it should immediately create jobs and help distressed homeowners and should not reward particular companies or reckless lenders or borrowers at taxpayer expense. He also said the plan should include tough new oversight and regulations for financial institutions and should be coordinated with U.S. partners in the G-20, a grouping of finance ministers and central bank governors of 19 countries plus the European Union.

Today's crisis results from "years and years of a philosophy in Washington and on Wall Street that viewed even common-sense regulation and oversight as unwise and unnecessary, that shredded consumer protections and loosened the rules of the road," Obama said. "CEOs and executives got reckless, lobbyists got what they wanted, and politicians in both parties looked the other way until it was too late. It is now the American people who've paid the price."

Obama said this week's events "have rendered a final verdict on that failed philosophy," which he vowed "will end if I am president of the United States."