Presidential candidates Barack Obama and John McCain on Tuesday urged their fellow lawmakers to act quickly on a plan to save America's collapsing financial sector, a day after the stock market chalked up a record one-day point decline when Congress rejected a $700 billion rescue effort.
Both avoided calling the plan a bailout, and they separately proposed that the government insure consumers' bank deposits up to $250,000, compared to the current $100,000 limit, to boost Americans' faith in weakened banks. Both sides also rolled out fresh advertisements tying the other to the Wall Street crisis.
Democrat Obama warned it would be "catastrophic" if a deal isn't reached soon. He said Congress should build on the bill rejected by the House of Representatives on Monday rather than starting from scratch on what he called "the economic rescue plan."
"Given the progress we have made, I believe we are unlikely to succeed if we start from scratch or reopen negotiations about the core elements of the agreement," the Illinois senator said in a statement. "But in order to pass this plan, we must do more."
McCain, whose own Republicans were largely responsible for sinking the bill, acknowledged that lawmakers had failed to convince voters that the deal was urgent.
He said he recommended to President George W. Bush on Tuesday morning that the Treasury's Exchange Stabilization Fund of $250 billion be used to shore up institutions and that the Treasury exercise its ability to buy up $1 trillion in mortgages.
"By the way, the first thing I'd do is say, 'Let's not call it a bailout. Let's call it a rescue.' Because it is a rescue. It's a rescue of Main Street America," the Republican senator said on CNN.
After voting down the Bush administration proposal, lawmakers poured scorn on one another then took a break for the Jewish New Year. They were expected later this week to resume negotiating a way out of the United States' worst financial crisis since the Great Depression of the 1930s.
In a brief televised address Tuesday morning, Bush warned that failure to act to save the rescue plan would inflict "painful and lasting damage to the economy."
Meanwhile, Obama and the Republican National Committee put out fresh TV ads on the crisis.
The two-minute Obama commercial promotes his economic plan and accuses McCain of following Bush's policies. The new Republican ad airing in six battleground states says Obama's economic plans would make things worse.
The ads came the morning after both Obama and McCain tried to deflect blame to each other.
Obama said McCain had been opposing needed financial regulation for years.
McCain declared Obama was putting his political ambitions ahead of the good of the nation, saying the presidential contest comes down to a simple question: "Country first or Obama first?"
McCain on Tuesday was meeting small business owners in Iowa, a Midwestern swing state where most polls show him trailing Obama. The Democratic contender was holding a rally in Reno, Nevada — one of several Republican-leaning Western states where Obama is locked in a tight race with McCain.
The vice presidential candidates, Democrat Joe Biden, the veteran Delaware senator, and Republican Alaska Gov. Sarah Palin, had no public campaign events scheduled as they prepared for their nationally televised debate Thursday night.
The stunning negative vote in the House of Representatives on Monday only fueled what has become an increasingly bitter race between McCain, a 26-year veteran of Congress and Vietnam prisoner of war, and Obama, a first-term Illinois senator who is seeking to make history as America's first black president.
More than two-thirds of Republicans — Bush's own party — and 40 percent of Democrats opposed the rescue bill.
The House vote sent the Dow Jones Industrial Average into a 777-point tailspin — its biggest point drop ever.
Voters are consumed with the flailing U.S economy and McCain and Obama are pounding the issue, portraying themselves as the candidate best prepared to steer the country out of its financial morass.
Obama has topped McCain in the polls since the financial crisis took a sudden turn for the worse with the bankruptcy of venerable Wall Street investment bank Lehman Brothers two weeks ago. The Gallup Poll daily tracking survey on Monday showed Obama with a 50 percent to 42 percent lead over McCain.
McCain has been dogged by gaffes, starting with his statement on the day that Lehman went bankrupt that the U.S. economy was fundamentally strong. Last week, the Republican suspended his campaign for a few days and tried unsuccessfully to delay his first debate with Obama to get involved in the bailout effort.