WASHINGTON – As negotiators from Congress and the White House worked feverishly through the weekend on a federal financial rescue package, President Bush asked lawmakers to look beyond partisanship and move quickly on the urgently needed measure.
The Bush administration is asking for congressional approval for the ability to take over troubled assets from banks and other tottering financial institutions, including purchasing sour mortgage-backed securities. The goal is to win congressional approval by the end of next week.
In his weekly radio address Saturday, Bush portrayed action as vital, not just to Wall Street but to Main Street. The subprime mortgage crisis has eroded confidence and frozen the movement of such things as consumer loans, he said.
Further stress on the nation's financial markets could reverberate and "cause massive job losses, devastate retirement accounts, further erode housing values, and dry up new loans for homes, cars, and college tuitions," Bush said.
His administration is asking Congress to let the government buy $700 billion in toxic mortgages in the largest financial bailout since the Great Depression, according to a draft of the plan obtained Saturday by The Associated Press.
The plan would give the government broad power to buy the bad debt of any U.S. financial institution for the next two years. It would raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue. The proposal does not specify what the government would get in return from financial companies for the federal assistance.
"Given the precarious state of our financial markets and their vital importance to the daily lives of the American people, government intervention is not only warranted, it is essential," he said.
With administration officials spurned into action in part out of fear of a run on typically rock-solid money-market funds, Bush sought to assure Americans that their money held in traditional checking accounts, savings accounts and certificates of deposit is safe and to announce that the administration is offering government insurance for eligible money market mutual funds.
The president also sought to calm the panicky public by saying that the economy will not remain in free fall.
"We have a flexible and resilient system that absorbs challenges, makes corrections, and bounces back," Bush said. "We will weather this challenge, too."