U.S. President George Bush says he is confident there will be a deal to rescue America's troubled financial sector, a day after lawmakers failed to pass his $700 billion plan. VOA White House Correspondent Scott Stearns reports, the bill's failure led to record losses in the U.S. stock market.
President Bush says this is a critical moment for a U.S. economy that is depending on decisive action from the federal government.
"As much as we might wish the situation were different, our country is not facing a choice between government action and the smooth functioning of the free market," he said. "We are facing a choice between action and the real prospect of economic hardship for millions of Americans. For the financial security of every American, Congress must act."
The House of Representatives Monday rejected the president's plan to buy up mortgage-backed securities that have lost value during the decline in the housing market.
Banks holding these assets are restricting credit, making it harder for businesses and consumers to get loans. So President Bush wants Congress to spend as much as $700 billion to buy up these securities, giving more banks more money to lend.
The plan's failure led to a record 778-point drop of the Dow Jones Industrial Average.
Speaking to reporters at the White House before markets opened Tuesday morning, Mr. Bush said America's economy is facing an urgent situation, the consequences of which will grow worse each day lawmakers fail to act.
"The dramatic drop in the stock market that we saw yesterday will have a direct impact on the retirement accounts, pension funds, and personal savings of millions of our citizens," he said. "And if our nation continues on this course, the economic damage will be painful and lasting."
Public opinion polls show many Americans oppose the plan. Many of the lawmakers who voted against the bailout are in competitive races for re-election just over a month before voters go to the polls.
Both major presidential candidates, Democratic Senator Barack Obama and his rival, Republican Senator John McCain, suggested Tuesday that the limit on bank deposits guaranteed by the U.S. government should increase from $100,000 to 250,000. They said that should help small businesses.
Obama and McCain urged lawmakers to keep working on a financial rescue plan.
The president said he understands that this is a difficult vote for many members of Congress, but he said addressing the problem and helping restore the economy and job growth is what elected leaders owe the American people.
Mr. Bush sought to reassure investors at home and abroad by saying he is confident a deal will be reached to rescue the financial sector. He said his administration is continuing talks with legislative leaders to move forward on a bill when they return to Capitol Hill Wednesday.