Bush warning over bail-out delay

US President George W Bush has warned the US economy is at a "critical moment", and vowed to get his Wall Street rescue plan through Congress.

He said the consequences would be "painful and lasting" if the $700bn (£380bn) deal rejected by the US House of Representatives was not passed.

He offered reassurances to citizens of the US and wider world that the current political deadlock would be resolved.

The New York stock market opened with prices up after Mr Bush's statement.

The Dow Jones index was about 2% higher in initial trading, rebounding from Monday's record losses.

In Brussels, the European Union earlier urged Washington to live up to its special responsibility and demonstrate statesmanship to resolve the global credit crisis.

'Not the end'

Mr Bush said at the White House: "We are in an urgent situation and the consequences will grow worse each day if we do not act."

The economy was depending on "decisive action on the part of our government", he added.

We're facing a choice between action and the real prospect of economic hardship for millions of Americans

President Bush


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He said he wanted to "assure our citizens and citizens around the world that this is not the end of the legislative process".

"Our country is not facing a choice between government action and the smooth functioning of the free market," he said.

"We're facing a choice between action and the real prospect of economic hardship for millions of Americans," he warned.

Republican presidential contender John McCain said he was disappointed at the "lack of resolve" shown by both parties in the US House of Representatives.

"The whole spectrum of Main Street America's economy is going to be jeopardised unless we pass this legislation. And we didn't do a good enough job selling it," Mr McCain told US television.


Markets in New York and around the world are having a rough ride

He said he had called Mr Bush on Tuesday, as did his Democratic rival, Barack Obama.

The White House described Mr Bush's conversations with the two presidential candidates as "very constructive".

The BBC's Jamie Coomarasamy in Washington says both the president and the two men who hope to succeed him in January are under pressure to show leadership amid the partisan bickering which has followed the bill's failure.

The White House candidates both backed lifting the limit on bank deposit insurance from the present $100,000 (£55,000) to $250,000 (£110,000) to prevent any run on commercial banks.

Blame claims

The rivals back the rescue plan, although each has accused the other of contributing towards its collapse.

Republicans and Democrats are blaming each other over the failed bill, which was rejected by 228 to 205 votes in the House of Representatives on Monday.

Some 133 Republicans and 95 Democrats refused to back the rescue package in a tense vote on the House floor.

The House is not due to meet again until Thursday as many members have gone home for a Jewish holiday.