President Bush said Tuesday the economic damage to the nation will be "painful and lasting" if Congress fails to pass a $700 billion bailout bill.
The president's latest statement on the financial crisis, a renewed mix of reassurances and warnings, came a day after the House voted narrowly to defeat the massive relief measure that his administration had negotiated with leading members of Congress. The failure of the plan stunned Washington and Wall Street.
"We're facing a choice between action and the real prospect of economic hardship for millions of Americans," Bush said in brief comments in the White House Diplomatic Reception Room. "And for the financial security of every American, Congress must act."
The two men who want Bush's job, Republican Sen. John McCain and Democratic Sen. Barack Obama, both called the president Tuesday morning. White House spokesman Tony Fratto said the two presidential contenders each offered ideas on what to do next, and reaffirmed that the crisis must be addressed.
"Both calls were very constructive," Fratto said. The White House will not comment on specific ideas as it tries to work out a deal with Congress, he said.
Bush sought to reassure the jittery markets that the breakdown on Capitol Hill was temporary.
"It matters little what a path a bill takes to become law," he said. "What matters is that we get a law."
Administration officials were talking to congressional leaders on Tuesday on how to keep legislation moving. Congress is on a break for the Jewish New Year.
"I recognize this is a difficult vote for members of Congress," Bush said. "Many of them don't like the fact that our economy has reached this point, and I understand that. But the reality is that we are in an urgent situation, and the consequences will grow worse each day if we do not act."
The House voted 228-205 Monday against the bill designed to stabilize a reeling financial system. Of those voting no, 133 were from Bush's own party. The defeat triggered the biggest one-day sell-off on Wall Street since the September 2001 terrorist attacks, as the Dow Jones industrial plummeted by 778 points.
"The dramatic drop in the stock market that we saw yesterday will have a direct impact on the retirement accounts, pension funds, and personal savings of millions of our citizens," Bush said. "And if our nation continues on this course, the economic damage will be painful and lasting."
Under the plan, the government would take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.
The economic troubles in the United States have shaken global markets. Accordingly, Bush targeted his comments to a worldwide audience.
"I assure our citizens — and citizens around the world — that this is not the end of the legislative process," he said.