WASHINGTON — As negotiators raced the clock in search of a compromise, President Bush used a rare prime-time address to the nation Wednesday night to try to convince a skeptical public and rebellious Republicans that the government must put $700 billion of taxpayers' money at risk to bail out the financial system.
Putting his battered prestige on the line, Bush painted a stark picture of the country's financial condition: "We're in the midst of a serious financial crisis. . . . Our entire economy is in danger," he said. "America could slip into a financial panic."
"This rescue effort is not aimed at preserving any individual company or industry. It is aimed at preserving America's overall economy," Bush said. "It will help American consumers and businesses get credit to meet their daily needs and create jobs. And it will help send a signal to markets around the world that America's financial system is back on track."
With financial markets still jittery and credit for day-to-day economic activity apparently freezing up, Bush said he would convene a White House meeting today with leading Democrats and Republicans, including the two parties' presidential nominees, to seek agreement on a plan.
In the wake of Bush's speech, Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, who had represented congressional Democrats in negotiations with the administration on the bailout, struck an optimistic note. "We are well on track to get an agreement, he said, adding, "I believe the votes will be there."
Frank explained the political logic of the situation this way: "Whatever you think about whether or not there was a need [for a bailout] . . . once the president, secretary of the Treasury and chairman of the Federal Reserve have announced that if you don't do this, there will be a collapse, there's probably going to be a collapse if you don't do it."
Key Democrats and Republicans from the House and Senate are scheduled to sit down today to draft a final bipartisan version of the plan.
Democrats had been waiting for Bush to speak out more prominently for the bailout plan and to demand that GOP lawmakers support it. They have argued that they should not have to take the political risk of passing the wildly unpopular measure without Republicans joining in, especially since they blame lax oversight by the administration and GOP advocacy of deregulation for causing the crisis.
