WASHINGTON - (AP) - President Bush said Friday that federalintervention in financial markets was not only warranted but "itis essential" to halt the worst financial crisis in decades.
"America's economy is facing unprecedented challenges. We'reresponding with unprecedented measures," Bush declared, standingin the White House Rose Garden with Treasury Secretary HenryPaulson, Federal Reserve Chairman Ben Bernanke and Christopher Cox,chairman of the Securities and Exchange Commission.
"This is a pivotal moment for America's economy," Bush said.He said that a financial contagion that began with low-quality homemortgages had "spread throughout our financial system" and "ledto an erosion of confidence that has frozen many financialtransactions," including those of countless consumers and smallbusinesses.
"We must act now to protect our nation's health from seriousrisk," he said.
He said steps being envisioned by the administration - whichPaulson said earlier Friday could entail "hundreds of billions"of dollars - were not without risk.
"Significant amounts of taxpayer dollars are on the line,"Bush said. Even so, he added, "We expect this money willeventually be paid back."
It was the third time this week that Bush had spoken on thefinancial crisis in an effort to calm jittery consumers andmarkets.
He pledged to work with the Democratic-controlled Congress on asystemwide proposal to improve the health of U.S. financialinstitutions.
He spoke after the administration said it would safeguard assetsin money market mutual funds and temporarily banned short-sellingof financial company stocks, a trading technique that bets onstocks declining in value. The Treasury Department has askedCongress to give it sweeping power to buy up toxic debt that hasunhinged Wall Street.
Bush also has authorized Treasury to tap up to $50 billion froma Depression-era fund to insure the holdings of eligible moneymarket mutual funds. And the Federal Reserve announced it willexpand its emergency lending program to help support the $2trillion in assets of the funds.Click here for Treasury Secretary Henry Paulson's comments on the planClick here for President Bush's reaction to the plan