President Bush, Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) should be applauded for bipartisanship, but the pending stimulus falls short, with a gathering storm of economic danger upon us.

There is a significant risk of a severe recession for consumers and business, a bear market for investors and, potentially, at some point, a Black Monday stock market crisis.

The contagion of credit crisis continues. Foreclosures continue to rise. Credit card markets deteriorate. Oil prices remain stratospheric. The value of the dollar has collapsed. Budget, trade and current account deficits remain huge. Most trend lines remain negative.

Bond insurers that service large financial institutions lose AAA ratings, their capital formation reaches dangerous lows, and their inability to insure new lending would create grave dangers for consumers and business.

What I hear from Wall Street and business journalists such as Bob Pisani of CNBC is that the bond insurance problems are very serious and there is a dangerous disconnect between Washington, Wall Street and Main Street.

America’s leading financial assets are being sold at heavily discounted prices, on highly unfavorable terms, to foreign investors, many of whom recycle petrodollars from Americans paying $3-a-gallon gasoline.

Short term these deals, sadly, are necessary, but as the dangers escalate we need a serious debate about the serious consequences.

The possibility of a cascading recession that spreads to global markets is real. The need for an anti-recession “insurance policy” is urgent. Chairman Greenspan, Chairman Bernanke, President Bush, Secretary Paulson, Congress and Wall Street leaders have all been wrong about this crisis. They must restore their credibility with policies equal to the task.

First, there must be a six-month freeze on foreclosures. If another million homes are foreclosed upon, the stimulus will be swept aside under a tidal wave of trouble.

Shame on the political media, with pundits interminably blathering about campaign tactics and bad predictions, without any substantial discussion of the economic dangers and solutions.

Second, the Fed must restore its credibility with decisive action, immediately, to cut interest rates by at least 100 basis points.

Third, I propose a one-time, $1.5 billion profits tax on oil companies. $1 billion would fund an employment tax rebate for small businesses hiring new workers. $500 million would fund aid to homeless vets, bonuses for troops returning from combat and public service grants to fixed-income grandparents and retirees who help poor, ill and orphaned kids.

Interest rate cuts are mandatory but hurt fixed-income Americans, and this must be redressed.

The president should consider this modest call on oil companies to help America. It would be an insignificant monetary sacrifice by a sector that has profited handsomely throughout the crisis and should be asked, like others, what it will do for our country.

This would increase the stimulus dramatically. It would inject capital into small business to fuel jobs and growth, without measurable impact on deficits or inflation.

Fourth, if Saudi Arabia does not use its influence to try to lower oil prices, new arms sales should be terminated.

Our crisis today is real. The common sense of the matter is clear. The gathering storm is upon us. The sooner we act, the stronger the program, the greater the good and the lesser the pain. We should escalate the bipartisanship and increase the power of the program.

Budowsky was an aide to former Sen. Lloyd Bentsen and Bill Alexander, then chief deputy whip of the House. He can be reached at This email address is being protected from spam bots, you need Javascript enabled to view it