WASHINGTON - President Bush stood outside the Treasury Department today and explained why his administration made a weekend decision to pump $20 billion of bailout money into flailing financial giant Citigroup.
He said more such bailouts may be coming.
"This is a tough situation for America. But we will recover from it. And the first step to recovery is to safeguard our financial system," Bush said.
Bush explained that if his administration had decided to just let once-mighty Citigroup die, it could have further frozen up financial institutions already frightened to do almost any lending.
"We have made these kind of decisions in the past, made one last night, and if need be, we're going to make these kind of decisions to safeguard our financial system in the future," Bush said, standing next to Treasury Secretary Henry Paulson.
Citigroup has been harder hit than most financial institutions by the huge spike in foreclosures because it holds so many of those notoriously risky subprime mortgages.
Last week, Citigroup shares suddenly lost 60 percent of their value as investors worried the hundreds of billions of dollars in risky debt could turn into a killer amount of losses as the economy spirals downward.
In his two-minute appearance before the news media today, President Bush may have also been reacting to a dramatic, unprecedented idea suggested Sunday on "Meet the Press" by his father's former treasury secretary, James Baker. Baker suggested that Bush and Obama work jointly on some emergency stimulation proposal.
"Nothing would do more to create confidence and eliminate the fear and anxiety that's out there, particularly in financial markets, than to see the incoming president and the outgoing president get together on some sort of proposal," Baker said on the NBC broadcast.
Today, Bush said that Secretary Paulson is working closely with the president-elect's transition team.
"It's important for the American people to know that there is close cooperation," he said. "It's important for the American people to know that we will safeguard the financial system as the first step necessary for economic recovery."
Obama has said there can only be one president at a time, but both he and Bush are receiving pressure to work together to do whatever is necessary to stave off the economy possibly falling into a depression.