George Bush made a statement today about the failure of the House to pass the agreement that leaders of both parties hammered out over the weekend.  He acknowledged the difficulty of the vote, but underscored the difficulty of the situation and the need to address it quickly.  The drop in the stock market yesterday represented a less of $1 trillion dollars, and the cost to taxpayers would be much less — and perhaps nothing at all, if the assets can recover their value over time.

The consequences of delay will make this problem worse, and Bush said he will press Congress for action when they return.  “Our economy is depending on decisive action by the government,” Bush warned, and continued inaction will send a very bad message to global markets.

Interestingly, Bush didn’t announce any further actions today.  Some had expected Bush to announce a move by the FDIC to expand its protections for depositors as a means of injecting confidence into the banking industry.  That could still come today, and Darrell Issa mentioned that Republicans favor this approach over the Paulson plan as modified by Congress.

Meanwhile, the global collapse didn’t come immediately.  CNBC attributes this to continued breath-holding in the markets, but the Russian exchange had to halt trading after sliding more than 7 percent.  Global banks began hoarding dollars, which may help the currency but points to a fear of tighter credit.

Steve Forbes, who has served as a voice of free-market sanity over the decades, told CNBC that Congress should have passed the bill yesterday.  He blamed Nancy Pelosi and Henry Paulson for its failure, especially Paulson, who he accused of having diplomatic skills of a “drill sergeant to young recruits” with Republicans over the past week.  The Bush administration tried selling this as a bailout, when Forbes says that distorts what the bill rejected yesterday would actually do.

Options on the Dow look about 200 points higher this morning.  If the administration acts to expand FDIC funding as a means of assuring some liquidity, perhaps we may see some light at the end of the tunnel today.  And if Congress thinks this is an emergency, they would have been working on Rosh Hashana rather than taking a day off.