(RTTNews) - “Disappointed with the outcome” might be an understatement of President George W. Bush’s reaction to the failure of the Emergency Economic Stabilization Act to pass in the House of Representatives on Monday.

Speaking early Tuesday morning, the president assured “our citizens and citizens around the world that this is not the end of the legislative process,” which he added can be “contentious.”

“This is a very critical moment for our economy,” Bush said in the televised remarks.

While the president recognized that supporting any sort of bailout cold be a “very difficult vote for many members of congress,” he said the reality is that the U.S. economy is in an “urgent situation and the consequences will grow worse each day if we fail to act.”

“If our nation continues on this course the economic impact will be painful and lasting,” Bush warned.

The vote on the Emergency Economic Stabilization Act failed by a count of 205 in favor to 228 opposed. More than half of the House Democrats voted for the measure, which was originally put forward by the Bush administration. Only a third of House Republicans backed the measure.

The bill under review would have allowed the government to buy up to $700 billion of mortgage-related assets, which have become nearly impossible to get rid of after the slump in housing prices. Experts identify these illiquid assets as the source of the financial difficulties that have forced a series of bankruptcies and near-bankruptcies of some of the country’s biggest financial firms.

Leading lawmakers had spent more than a week in intense negotiation with Bush administration officials to reach a compromise package. While many provisions were added to make the deal more palatable to members of Congress, many, especially Republicans in the House, felt philosophically opposed to such a large financial rescue.

Wall Street saw an historic sell-off in response to the failure of the financial rescue plan. The Dow Jones Industrial Average finished lower by nearly 778 points - its biggest single-day point loss in history.

In his remarks, Bush recognized that the figure - $700 billion - is large and can be unsettling to taxpayers.

“That no question is a large amount of money,” he said. “We are also dealing with a large problem.”

The president predicted that the rescue would cost the taxpayers far less than the $700 billion, and “much if not all” of the taxpayer dollars will be paid back.

He made no bones about the severity of the situation, stating, “Congress must act.”

The nation is “facing a choice between action and economic hardship,” Bush said.

“Our economy is depending on decisive action from the government,” he added. “I am confident we’ll deliver it.”

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Posted in Categories: Economy, Releases.

Subscribe by RSS Subscribe by Email