President Bush said Sunday the $700 billion financial bailout being finalized by Congress would help protect the U.S. economy from a “system-wide breakdown” and expressed confidence it would be approved quickly.
“This plan sends a strong signal to markets around the world that the United States is serious about restoring confidence and stability to our financial system,” Bush said in a written statement. “Without this rescue plan, the costs to the American economy could be disastrous.”
Bush will make a statement at 7:35 a.m. Monday, the White House said.
The compromise legislation would authorize the government to buy illiquid assets from financial institutions and hold them until they could be sold later. The measure aims to unblock frozen global credit markets.
Some $250 billion would be available immediately with another $450 billion in the pipeline if necessary.
The House could vote on the bill Monday followed by action by the Senate possibly by Wednesday.
Bush, in his written statement, said he realized the vote by lawmakers, most of whom are up for re-election on Nov. 4, would be tough. Conservative Republicans are unenthusiastic about government’s expanded role in markets.
“This is a difficult vote, but with the improvements made to the bill, I am confident Congress will do what is best for our economy by approving this legislation promptly,” he said.
Congressional Democrats and Republicans added numerous safeguards to the original proposal, including protections for taxpayer dollars and curbs on executive salaries for companies that participate in the program.
Congressional leaders and the administration raced to finish the legislation before financial markets opened in Asia on Monday.
Negotiations nearly unraveled last week when a group of conservative House Republicans said they preferred the government offering mortgage insurance to failing financial institutions instead of buying their soured assets.
A mortgage insurance provision was included in the legislation, giving the Treasury Department wide latitude to develop details.
“This bill provides the necessary tools and funding to help protect our economy against a system-wide breakdown,” Bush said. “The bill will help allow access to credit so American families can meet their daily needs and American businesses can make purchases, ship goods, and meet their payrolls.”
Addressing concerns by Republicans worried about the size of the bailout, the head of the White House budget office, Jim Nussle, wrote House Republican leader Rep. John Boehner telling him the impact would be much less than $700 billion.
“The $700 billion figure is substantial, of course, but the size of the problem in our financial markets requires a commitment of this size,” Nussle said. “For several reasons, however, the impact on the taxpayer will be considerably less than $700 billion.”
He added that the government can “expect a substantial payback on our investment.”
(Editing by Chris Wilson)
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