U.S. President George Bush says America's economy is facing a "pivotal moment" in a financial crisis that began with risky home mortgages now spreading throughout the financial system and eroding consumer confidence. VOA White House Correspondent Scott Stearns reports, Mr. Bush wants Congress to buy up securities based on those risky mortgages to protect the nation from "serious risk."
President Bush says America's free enterprise system rests on the conviction that government should interfere in the market only when necessary. Given what he calls the precarious state of today's markets, Mr. Bush says that intervention is not only warranted, it is essential.
"America's economy is facing unprecedented challenges. And we are responding with unprecedented action," the president said.
Treasury Secretary Henry Paulson Friday outlined a program to buy up bad mortgage-backed securities that he says will cost hundreds of billions of dollars.
The action requires congressional approval, and Paulson briefed leaders on the plan Thursday evening. A top lawmaker on the Senate banking committee, Alabama Republican Richard Shelby, says bailing out financial markets could cost U.S. taxpayers up to one-trillion dollars.
Speaking to reporters in the White House Rose Garden, President Bush says decisive action is needed to preserve America's financial system and sustain the overall economy.
"These measures will require us to put a significant amount of taxpayers' dollars on the line," Mr. Bush said. "This action does entail risk, but we expect that this money will eventually be paid back."
The president says the risk of not acting would be far higher.
"Further stress on our financial markets would cause massive job losses, devastate retirement accounts, and further erode housing values, as well as dry-up loans for new homes and cars and college tuition," he said. "These are risks that America can not afford to take."
The Bush administration says it will safeguard assets in money market mutual funds and has temporarily banned the short-selling of financial company stocks, which allowed traders to bet on those stocks declining in value.