Bush Warns of Painful US Recession Without Quick Action on Rescue Plan

By Paula Wolfson
White House
25 September 2008

U.S. President George Bush has invited both presidential candidates and the Congressional leadership to the White House in hopes of securing a deal to help the nation's ailing financial sector. VOA's Paula Wolfson reports the president urged public support for the rescue plan in an unusual nationally broadcast speech to the nation late Wednesday.

President Bush delivers TV speech on financial crisis, 24 Sep 2008

The president says the economy is in danger and something must be done. "We are in the midst of a serious financial crisis and the federal government is responding with decisive action" he said.

In a rare evening address from the White House, the president tried to put the complicated financial crisis in layman's terms. He said the problems now facing Wall Street could eventually reach into every American home.

"More businesses would close their doors and millions of Americans could lose their jobs. Even if you have a good credit history, it would be more difficult to get the loans you need to get a car or send your children to college. And ultimately, our country could experience a long and painful recession," the president said.

Until recently, President Bush was saying that the American economy is sound. Now, the White House is using different words to describe America's fiscal health, saying the financial system is strong enough to survive the current market turmoil.

But the medicine for the ailing economy will come at a very steep price. The Bush administration wants Congress to approve $700 billion to buy out the bad debt now held by major financial institutions.

Everyone agrees that something must be done. But many lawmakers are skeptical about setting aside all that money to help private companies. And they worry about leaving responsibility for distribution of the funds with one person - Secretary of the Treasury Henry Paulson.

Democrats, like Brad Sherman of California, complain the rescue package does a lot to help over-extended financial institutions, and not enough to help private citizens. "The only thing that is certain is if we pass this bill, Wall Street will be happy," he said.

But the loudest opposition to the financial bail-out plan seems to be coming from fiscal conservatives in the president's own party. Republican Cliff Stearns of Florida is one of them. He says it would expose American taxpayers to great financial risk. "Through these bailouts our federal government is effectively risking hard earned taxpayers' dollars to protect private-sector companies that utilize reckless investment strategies with little regard to the consequences," he said.

On Thursday, the president will do some closed-door campaigning for the financial rescue plan at a White House meeting with Congressional leaders and the two major party presidential candidates.

Democrat Barack Obama and Republican John McCain are urging their colleagues in the legislature to approach the issue in a bipartisan fashion.

In a highly unusual joint written statement released just minutes before the president's speech, they say everyone must work together to prevent "an economic catastrophe."