Bush says US bailout plan will be passed

• Last Updated: September 26. 2008 8:40PM UAE / September 26. 2008 4:40PM GMT

President Bush speaks on the negotiations to finalize legislation on the financial rescue package at the White House on Sept 26 2008. Pablo Martinez Monsivais / AP

WASHINGTON // George W Bush scrambled today to bring rebellious members of his own party behind a multibillion-dollar government bailout of the US financial system amid bitter political recriminations from both Democrats and Republicans over collapsed negotiations.

Mr Bush delivered a terse statement at the White House, acknowledging that lawmakers have a right to express their doubts and work through disagreements, but declaring they must "rise to the occasion" and approve a plan to avert an economic meltdown.

"There are disagreements over aspects of the rescue plan," he said, "but there is no disagreement that something substantial must be done. We are going to get a package passed."

Earlier today, the House Financial Services Chairman Barney Frank declared that an agreement depends on House Republicans "dropping this revolt" against the Bush-requested plan.

The Democrat said leading members of his party in Congress were shocked by the level of divisiveness that surfaced at yesterday's extraordinary White House meeting, leaving six days of intensive efforts to agree on a bailout plan in tatters only hours after key congressional players of both parties had declared they were in accord on the outlines of a $700 billion (Dh2.75 trillion) bill.

Bush decided to speak and also was in constant contact with the US Treasury Secretary Henry Paulson, who was returning to talks with lawmakers, the White House press secretary Dana Perino said. The Vice-President Dick Cheney canceled planned travel today to New Mexico and Wyoming to remain in Washington and lobby lawmakers.

The campaign season's first face-to-face debate between presidential candidates John McCain and Barack Obama, scheduled for tonight, was still in doubt.

Stocks are sharply lower in early trading as and the seizure of Washington Mutual by federal regulators is also serving as a sobering reminder of the widespread problems in the banking industry.

Meanwhile, credit markets are tightening further as fears of a deepening economic crisis are driving investors to buy safe-haven Treasury bills. The Dow Jones industrial average is down 126 at the 10,895 level.

In another dose of unnerving news, the Commerce Department said the spring’s economic rebound was less robust than previously estimated.

The market was already tense after the Federal Deposit Insurance seized WaMu yesterday, and then sold the thrift’s banking assets to JPMorgan Chase & Co. for $1.9bn. It was the largest bank by far to fail in the country’s history and the latest financial firm to collapse under the weight of enormous bad bets on the mortgage market.

* AP