US President George W Bush has warned the US economy

Bush warning over bail-out delay George Bush says the cost of not acting will be higher than the $700 billion rescue deal US President George W Bush has warned the US economy is at a "critical moment", and vowed to get his Wall Street rescue plan through Congress. He said the consequences would be "painful and lasting" if the $700bn (£380bn) deal rejected by the US House of Representatives was not passed. He offered reassurances to citizens of the US and wider world that the current political deadlock would be resolved. The New York stock market rallied strongly after Mr Bush's statement. The Dow Jones index closed up 4.7%, recouping some losses from Monday's rout. European stocks bounced up and down, while most Asian markets finished the day down. The European Union earlier urged Washington to act and solve the credit crisis, amid fears America was lurching towards a financial crisis unmatched since the 1930s Great Depression. 'Not the end' Mr Bush said at the White House: "We are in an urgent situation and the consequences will grow worse each day if we do not act." The economy was depending on "decisive action on the part of our government", he added. We're facing a choice between action and the real prospect of economic hardship for millions of Americans President Bush Where votes went in the bill Q&A: US $700bn rescue plan World reacts to US bail-out rejection He said he wanted to "assure our citizens and citizens around the world that this is not the end of the legislative process". "Our country is not facing a choice between government action and the smooth functioning of the free market," he said. "We're facing a choice between action and the real prospect of economic hardship for millions of Americans," he warned. Republican presidential contender John McCain said he was disappointed at the "lack of resolve" shown by both parties in the US House of Representatives. "The whole spectrum of Main Street America's economy is going to be jeopardised unless we pass this legislation. And we didn't do a good enough job selling it," Mr McCain told US television. Anxious traders on the floor of the New York Stock Exchange on Tuesday 30 September 2008 Markets in New York and around the world are having a rough ride He said he had called Mr Bush on Tuesday, as did his Democratic rival, Barack Obama. The White House described Mr Bush's conversations with the two presidential candidates as "very constructive". Mr Obama told a rally of voters in Reno, Nevada: "We must act and act now. We can't have another day like yesterday." The BBC's Jamie Coomarasamy in Washington says both the president and the two men who hope to succeed him in January are under pressure to show leadership amid the partisan bickering which has followed the bill's failure. Blame claims The rivals back the rescue plan, although each has accused the other of contributing towards its collapse. Republicans and Democrats in Congress are blaming each other over the failed bill, which was rejected by 228 to 205 votes in the House of Representatives on Monday. Some 133 Republicans and 95 Democrats refused to back the rescue package in a tense vote on the House floor. On Tuesday, the two leading Democrats in Congress, Senator Harry Reid and House of Representatives Speaker Nancy Pelosi, wrote to President Bush saying they expected a bipartisan rescue plan to soon be approved. "Working together, we are confident we will pass a responsible bill in the very near future," they said. HAVE YOUR SAY I know we need a strong financial sector, but where is the talk of structural change that's going to prevent recurrence? Neil, California, US Send us your comments The House is not due to meet again until Thursday as many members have gone home for a Jewish holiday. For the second time in as many days on Tuesday, Western European governments stepped in to prop up an ailing financial institution. The French and Belgian governments rescued the Franco-Belgian financial services group, Dexia, with a package totalling more than $9bn (£5bn).