"I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention," President Bush said. "But these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence, and major sectors of America's financial system are at risk of shutting down."
In his first primetime speech to the nation in more than a year, the president outlined the basic causes for the current economic meltdown and stressed the need for the government to take unprecedented steps to stabilize the situation.
"This rescue effort is not aimed at preserving any individual company or industry. It is aimed at preserving America's overall economy," the president cautioned.
Just a week ago, the president proposed a massive $700 billion proposal that would allow the government to purchase most of the bad mortgages and failing investments that have threatened to undermine key sectors of the financial system and put a stranglehold on banks' willingness to lend money.
In his address, the president admitted he had heard much of the criticism from member of Congress to his initial plan, saying a final agreement needed to protect the American taxpayer, that the heads of the troubled financial institutions should not reap windfall salaries at the expense the bailout and finally that a bipartisan panel should oversee the government's actions.
"I think we are headed in the right direction... Inaction is simply not an option," U.S. Rep. Luis Gutierrez, the Illinois Democrat who earlier in the day had pressed the administration on the executive compensation issue, told the NewsHour Wednesday night.
But not all members of Congress hailed the president's comments, with at least one influential member of the House warning that elected officials were being presented with an unfair situation.
"Members of Congress were being asked to choose between an economic catastrophe and a possible taxpayer catastrophe," U.S. Rep. Jeb Hensarling, R-Tx., said after the president spoke.
"What we don't want to have happen is to fundamentally change the role of government in the American economy for generations to come," he added.
Acknowledging the fear of over-regulation by some in his own party, the president stressed that as the federal government considers new rules governing the financial system, "they must ensure that efforts to regulate Wall Street do not end up hampering our economy's ability to grow."
Despite concerns from some, House Financial Service Committee Chairman Barney Frank, D-Mass., told news services that he believed he had the votes to pass a bailout plan this week and that the leaders of Congress would meet with the president Thursday at 10:00 a.m. ET to work on a final proposal.
Presidential contenders Sens. Barack Obama and John McCain both spoke with Mr. Bush before he addressed the nation, agreeing to attend Thursday's meeting in Washington.
Also late Wednesday the two campaigns issued a three-paragraph statement urging changes to the president's initial plan and swift passage of an improved proposal.
"Now is a time to come together Democrats and Republicans in a spirit of cooperation for the sake of the American people," their joint statement read. "The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail."
"This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe," they said.
Obama said in a statement he issued on his own that both he and McCain agreed that the bailout must be passed without any other measures attached.
The presidential address and joint statement came just after the top leadership of the House issued their own combined statement aimed at highlighting the bipartisan effort underway to craft a compromise.
House Speaker Nancy Pelosi, D-Calif., and House Republican leader John Boehner of Ohio pledged in a combined public statement, that, "We are committed to continuing to work cooperatively and on a bipartisan basis to safeguard the interests of the American taxpayers."
The two partisans also stressed swift passage of any legislation would require the Bush administration to change key parts of the bill.
"We agree that key changes should be made to the administration's initial proposal. It must include basic good-government principles, including rigorous and independent oversight, strong executive compensation standards and protections for taxpayers," their statement read.
The flurry of political pronouncements followed another bruising day of testimony by the administration's top financial team of Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson on Capitol Hill. Despite the dire warnings by both Paulson and Bernanke, both Democrats and Republicans expressed deep reservations about what the administration has proposed.
"I am sure that every single one of my colleagues on both sides of the aisle has heard what I have heard from my constituents: amazement, astonishment, and intense anger," Joint Economic Committee Chairman Chuck Schumer said.
It was a frustration that the economic team acknowledged, specifically citing anger among many Democrats over the lack of specific accountability and few limits on issues like compensation for the heads of the firms to be aided by the federal money.
"The American people are angry about executive compensation and rightfully so," Paulson told the House Financial Services Committee, during a stormy session there. "We must find a way to address this in the legislation without undermining the effectiveness of the program."
But even in addressing Congressional concerns, Bernanke in particular said a sweeping move was needed to stabilize the markets and the economy.
"I think the concern is that the markets need to have confidence that this problem will be attacked with sufficient force and addressed," Bernanke said when pressed about passing a smaller measure in the short-term. "Insufficient measures could be perceived as dribs and drabs, and it may not have the sufficient force to address the confidence issue."
Amid the dire warnings, GOP and Democratic lawmakers alike voiced their continued concerns over the plan -- which would give Treasury officials unfettered authority to buy mortgage debt, taking it off the books of struggling financial institutions weighing on the U.S. markets.
"It's a tough sell to most of our members," said Rep. Tom Davis, R-Va., after a closed-door meeting with Treasury Secretary Henry Paulson and Bernanke, according to the Associated Press. "It's a terrible plan, but I haven't heard anything better."
Paulson held meetings for the second consecutive day with House Republicans, some of whom have voiced their opposition to any federal bailout of the private financial markets that form the backbone of American capitalism.
The president, attempting to strike a strong tone of bipartisanship throughout his address, said he hoped leaders from both sides of the political aisle would move quickly in the face of such a major crisis.
"I know that Americans sometimes get discouraged by the tone in Washington and the seemingly endless partisan struggles, yet history has shown that, in times of real trial, elected officials rise to the occasion," the president said as he wrapped up his speech. "And together we will show the world once again what kind of country America is: a nation that tackles problems head on, where leaders come together to meet great tests."
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