Sen. Byron Dorgan, D-N.D., called President Bush's $700 billion Wall Street bailout "unbelievable" on Monday, saying the plan would do nothing to prevent another financial crisis.

"I am prepared to take aggressive emergency action to prevent a collapse of our financial system," Dorgan said in a Monday press statement. "But this proposal looks to me like a stampede in the wrong direction."

The White House lobbed its plan to Congress over the weekend in light of the worst financial crisis since the days following the Sept. 11, 2001, terrorist attacks. The proposal would give the Treasury Department sweeping powers to buy up toxic assets in ailing Wall Street investment firms to put an end to the financial hemorrhaging that stems from the sub-prime mortgage crisis.

The proposal, if passed, would be the largest federal bailout in history. Dorgan said immediate action needs to be taken by Congress, but added that the proposal by Treasury Secretary Henry Paulson Jr. would be a "rushed, blank-check, no-strings-attached Wall Street bailout."

"What he is saying in effect: 'We are not going to allow anything to correct the problems that caused this mess,'" Dorgan said.

Senate Democrats began circulating a bill this week that would expand the White House proposal. Dorgan said Monday that he had not seen the Senate measure drafted by Sen. Chris Dodd, D-Conn., chairman of the Senate Committee on Banking, Housing and Urban Affairs.

Dodd's bill expands oversight on the federal purchases of Wall Street debt and provides assistance for homeowners involved in faulty mortgages.

President Bush has pressured Congress to pass his administration's proposal this week in light of the growing problems on Wall Street. He has also asked Congress to refrain from adding more language to the Treasury Department's three-page bailout proposal. Dodd's bill is 44 pages.

"Obviously, there will be differences over some details, and we will have to work through them," President Bush said in a Monday press statement. "But it would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan."

Dorgan said a bill passed by Congress in 1999, the Financial Services Modernization Act, which took out many regulations of the banking industry that were put into place after the Great Depression, led to many of the risky lending practices that caused the current Wall Street woes.

That bill passed the Senate 90-8, with Dorgan voting nay. Sen. Kent Conrad, D-N.D., voted for the measure.

"Taking down those protections made no sense at all," Dorgan said. "The result now has been a financial crisis unequaled since the Great Depression."

Dorgan said those regulations, first drafted in the Glass-Steagall Act of 1933, need to be made into law again along with measures to protect homeowners and taxpayers.

The Dow Jones industrial average dropped more than 370 points on Monday in light of congressional squabbling over a bailout plan. Oil prices shot up about $25 a barrel.

(Reach reporter Brian Duggan at 223-8482 or brian.duggan@;bismarcktribune.com.)