WASHINGTON — Federal regulators rolled out the first pieces of their sweeping plan to end the nation's financial crisis Friday, moving to insure up to $2 trillion in money market mutual funds and temporarily barring investors from betting on the decline of financial company stocks.
The moves came as lawmakers awaited the keystone of the new panic-fighting plan -- the proposal for a federal takeover of the troubled mortgage assets that now clog the books of banks and securities firms.
Exactly how the takeover would be accomplished -- and at what potential cost to taxpayers -- is still being worked out inside the Bush administration. Concerns were raised Friday, however, by Republicans anxious about the price tag and by Democrats who fear that the rescue plan would favor highflying financiers over ordinary Americans.
Still, expectations for a comprehensive rescue plan led to a strong rally on Wall Street for a second straight day, with the Dow Jones industrial average posting its biggest back-to-back point gains in more than eight years.
"This is a pivotal moment for America's economy," President Bush said during a brief appearance in the White House Rose Garden. "We must act now to protect our nation's economic health from serious risk. There will be ample opportunity to debate the origins of this problem. Now is the time to solve it."
The chief architects of the latest effort, Treasury Secretary Henry M. Paulson and Federal Reserve Chairman Ben S. Bernanke, gave new hints about the dimensions of their proposal, which would probably be the largest government intervention in the financial markets since the 1930s.
"We're talking hundreds of billions," Paulson told a morning news conference. "This needs to be big enough to make a real difference and get at the heart of the problem."
The two men spent much of their day on the phone pleading for speedy action by Congress on their "bad asset" plan, and lawmakers who spoke with them said the pair presented a sobering picture of just how fragile financial markets have become.
"All of us are prepared to do whatever we can this weekend . . . to fashion a proposal that will get us out of this mess," said Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, who was expected to shepherd the plan through the Senate. "We understand the gravity of the moment."
