President Bush Urges Congress to Act After Bailout Bill Failure

President Bush Tuesday said the U.S. economy was depending on decisive action from the government on a financial bailout plan or the economic damage could be “painful and lasting.”

“I assure our citizens and citizens around the world that this is not the end of the legislative process,” Bush said as he sought to calm jittery world markets a day after the House of Representatives rejected a $700 billion rescue package for the U.S. financial system.

He pledged that his economic advisers would press ahead this week with talks with key lawmakers aimed a formulating legislation to deal with what analysts have called the worst U.S. financial crisis since the Great Depression.

“Congress must act,” Bush said at the White House.

Stock markets plunged on Monday after the House voted 228-to-205 against a compromise bailout plan that would have allowed the Treasury Department to buy up toxic assets from struggling banks.

House Republicans, in particular, balked at spending so much taxpayer money just before the Nov. 4 U.S. elections.

Bush spoke after huddling on Monday with economic policymakers, including Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, to consider the administration’s next move.

The failure of the bailout bill — after more than a week of intensive closed-door negotiations — brought new uncertainty about how long it would take for the government to act.

“We’re at a critical moment for our economy and we need legislation that decisively addresses the troubled assets now clogging the financial system, helps lenders resume the flow of credit to consumers and businesses and allows the American economy to get moving again,” he said.

He said Monday’s stock market dive, including the Dow’s biggest point decline ever, was having a direct impact on pension funds and personal savings.

“If our nation continues on this course the economic damage will be painful and lasting,” he said.

He said he understood the objections of some members of Congress, including many in his own Republican party, to the financial rescue package, but insisted action was urgently needed.

(Reporting by Deborah Charles and Matt Spetalnick; Editing by Theodore d’Afflisio)