WASHINGTON — President Bush appealed to the nation Wednesday night to support a $700 billion plan to avert a financial meltdown on Wall Street, and he invited both major presidential candidates to join him and congressional leaders at the White House on Thursday to forge a bipartisan compromise.
"Our entire economy is in danger," he said.
Warning that "a long and painful recession" could occur if Congress does not act quickly, Bush said the consequences could play out in "a distressing scenario," including potential bank failures, job losses and inability for ordinary Americans to borrow money to buy cars or send their children to college.
"Fellow citizens, we must not let this happen," he said.
The address, and the extraordinary offer to bring together Sen. Barack Obama, the Democratic presidential nominee, and Sen. John McCain, the Republican, just weeks before the election underscored a growing sense of urgency on the part of the administration that Congress must act to avert a far-reaching economic collapse.
It was the first time in Bush's presidency that he delivered a prime-time address devoted exclusively to the economy, and it came at a time when deep public unease about shaky financial markets has been coupled with skepticism and anger directed at a government bailout that would be the most expensive in American history.
The address capped a fast-moving and chaotic day in Washington, on the presidential campaign trail and on Wall Street.
On Capitol Hill, delicate negotiations between Treasury Secretary Henry M. Paulson Jr. and Democratic and Republican leaders on the bailout plan were complicated by a backlash from rank-and-file lawmakers hearing complaints from constituents.
For the first time, the administration signaled that it would be willing to make major concessions to secure congressional approval, including limits on pay of executives whose firms seek government assistance and a plan to give taxpayers an equity stake in some of the firms so that the government can profit if the companies prosper in the future.
On Wall Street, financial markets continued to struggle. The cost of borrowing for banks, businesses and consumers shot up and investors rushed to safe havens like Treasury bills — a reminder that credit markets, which had recovered somewhat after Paulson announced the broad outlines of the bailout plan last week, remain under severe stress, with many investors still skittish.
Congressional leaders and Treasury officials said they expected to work through the night Wednesday as their talks intensified into detailed negotiations over specific legislative provisions.
A senior Democratic leadership aide said that lawmakers from both the House and Senate planned to meet at 10 a.m. Thursday to hammer out "a final bipartisan bill to be passed and signed into law." The aide, who asked not to be named because of the delicate nature of the talks, said, "Not too many unresolved issues remain."
Sen. Christopher J. Dodd, D-Conn. and chairman of the banking committee, said a deal could come together as early as Thursday. Several lawmakers said they expected Congress to work through the weekend. By early evening, after McCain said that "it has become clear that no consensus has developed to support the administration's proposal," House leaders in both parties declared they were, in fact, moving forward.
"Working in a bipartisan manner, we have made progress," the House speaker, Nancy Pelosi, and Rep. John A. Boehner, the Republican leader, said in a joint statement. "We agree that key changes should be made to the administration's proposal. It must include basic good-government principles, including rigorous and independent oversight, strong executive compensation standards and protections for taxpayers."
On Capitol Hill, Paulson, facing a second day of questioning by lawmakers, this time before the House Financial Services Committee, tried to focus as much on Main Street as Wall Street. "Every business in America relies on money flowing through the financial system every day," the Treasury secretary said.
In perhaps his most pointed pitch to the C-Span audiences around the country, Paulson said: "This entire proposal is about benefiting the American people because today's fragile financial system puts their economic well-being at risk." Without action, he added: "Americans' personal savings and the ability of consumers and business to finance spending, investment and job creation are threatened."