WASHINGTON – President Bush will address the nation Wednesday at 9 p.m. ET about the need to prevent an economic crisis and his administration's controversial $700 proposed bailout plan, which his spokeswoman says will prevent a "calamity" on Wall Street.
Meanwhile, Treasury Secretary Henry Paulson accepted a major revision in the bailout plan that would limit the pay packages of executives whose companies benefit from the proposal, according to Republican officials who spoke on condition of anonymity because Paulson's decision had not been formally announced.
Also, Sen. John McCain suspended his presidential campaign Wednesday to help with bailout negotiations. He urged his opponent Barack Obama to do the same and asked the Presidential Debate Commission to postpone Friday's scheduled debate with Obama.
The White House stood behind McCain's move.
"We welcome Sen. McCain's announcement," White House spokeswoman Dana Perino said in a written statement. "We are making progress in negotiations on the financial markets rescue legislation, but we have not finished it yet. Bipartisan support from Sens. McCain and Obama would be helpful in driving to a conclusion. The financial market crisis is a big problem that requires a big solution, and solving this in a bipartisan way will help prevent economic damage spreading from Wall Street to all Americans."
The president will speak for about 12-14 minutes from the state floor of the White House, Perino announced. Perino announced the president's formal speech to the nation — his first such talk in over a year — after earlier saying that the country is at risk of a "calamity" without bold action to calm down the markets and soothe nervous Americans.
"The president believes it is important for the American people to fully understand the depths of the crisis affecting our country, how that affects them," Perino said. "I think everyone will tune in tonight because we are facing a once-in-a-century crisis in our financial markets."
Watch FOX News Channel and FOXNews.com at 9 p.m. ET for President Bush's address to the nation.
Putting it in layman's terms, Perino described the domino-like collapse of investment firms as an infection that needs to be stopped.
"The cold on Wall Street could infect Main Street," Perino said. "(People) are concerned about their homes, their education funds, their retirement accounts, their savings. ... I think Americans are plenty smart on this, but more information is certainly better."
The announcement followed a third day of testimony by Federal Reserve Chairman Ben Bernanke, who warned Congress on Wednesday that economic growth depends on a robust plan to relieve stress on the nation's lenders.
Bernanke told Congress' Joint Economic Committee that the Federal Reserve will "act as needed" to minimize disruptions to business life.
Reflecting the urgency of the situation, Bush canceled a fundraiser trip to Florida to help Republicans and had taken Air Force One back to Washington from a meeting of the U.N. General Assembly in New York. Bush had canceled a similar trip last week.
Perino said Bush has been trying to address the public's many questions and concerns and was weighing whether, when and where to have such a speech.
Lawmakers on Capitol Hill have questioned the integrity of the proposed bailout. Several suggested the president needed to speak to the nation to allay concerns that the government will be throwing good money after bad.
"The president of the United States needs to address a joint session of Congress .... needs to tell the nation what will happen if this legislation is not approved," said Rep. Emanuel Cleaver, D-Mo.
On Wall Street, the financial markets remained tense, with stocks fluctuating, following investor Warren Buffett's decision to invest $5 billion in Goldman Sachs Group Inc. The credit markets showed added strain as investors await news about the government's plan to rescue banks from crippling debt.
Amid a raft of statements of anger and doubt about the bailout plan, Sen. Lindsey Graham said Wednesday that "it's not my job to just echo people being mad. I'm going to choose the bad choice over the catastrophic choice."
Speaking to South Carolina reporters, the Republican said, "We don't have the luxury of kicking this can down the road like we did with immigration or social security and dealing with it another day hoping somebody braver than us will come along and have courage that we can't muster to deal with immigration or social security. This is on our watch."
Pleading for Congress to act quickly, Bernanke said: "Choking up of credit is like taking the lifeblood away from the economy."
Asked whether the country would plunge into a depression if lawmakers do not enact a bill, Bernanke said he didn't want to make such a comparison. But he also said there would be "certainly very negative implications," including likely losses on retirement funds and other investments held by millions of ordinary Americans.
Bernanke and Paulson made the case for the plan in a closed-door meeting with House Republicans Wednesday morning, where lawmakers voiced new doubts about the bailout and said their constituents were overwhelmingly opposed to it.
"The American people are furious about the fact that Congress is being asked to put up some $700 billion to help stem off this economic crisis," said Rep. John A. Boehner of Ohio, the GOP leader. Still, he said "Congress has a responsibility to act," and added that he hoped to strike a bipartisan deal that could pass within days.
Bush has an uphill battle in selling the rescue, however, even to members of his own party.
Asked during their session with Paulson how many of them backed the plan, just four Republican hands went up, said Rep. Thomas M. Davis III, R-Va.
"It's a tough sell to most of our members," Davis said. "It's a terrible plan, but I haven't heard anything better."
Republicans and Democrats both say Bush has lost credibility on Capitol Hill, particularly in cases where he argues there will be dire consequences if Congress doesn't act.
"They sold the war, they sold the stimulus package and some other things. It's the 'wolf at the door' " argument, Davis said.
"It's hard being trusting" of Bush's bailout plan, said Democratic Rep. Luis V. Gutierrez, D-Ill, who said the administration's full-court press to sell it reminded him of the one the White House mounted before the Iraq war.
"You feel like you're always getting hoodwinked, because they say the consequences if you don't do it is a complete demise and collapse of the system," he said.
Executives whose companies get a piece of the assistance would have their pay packages strictly limited under proposals that broadly supported by both Republicans and Democrats.
The administration was resisting that move as it scrambled to overcome widespread misgivings and swiftly push through its plan to rescue tottering financial firms by buying up their rotten assets.
But Paulson appeared to relent, saying he understood how the issue would play with voters, Republican members of Congress said after a meeting with him on Wednesday.
Frank has proposed adding substantial congressional oversight over the bailout and a requirement that the government make an effort to renegotiate as many of the mortgages it purchases in the rescue as possible to help strapped borrowers stay in their homes. Paulson was said to be willing to accept those revisions.
Frank also has been pushing to allow the government to buy equity — rather than just bad debt — in companies it helps so taxpayers can benefit from future profits. That idea is also gaining bipartisan support, but Paulson argues it would hamstring the very companies the government is trying to help.
He also is strongly opposed to another key Democratic priority: letting judges rewrite mortgages to lower bankrupt homeowners' monthly payments. Democrats view that measure as the heaviest lift and the most likely to be dropped as part of a final deal.
The Associated Press contributed to this report.