I serve on the budget committee in the US Senate, and prior to that served as a member of the banking committee of the House of Representatives. For the past seven years I have heard President George Bush and his administration tell us how "robust" the American economy was, and how all of its "fundamentals" were strong.

That was until a few days ago. Now, suddenly, the American Congress – and the American nation – are being told that if Congress does not act immediately and approve a $700bn Wall Street bailout proposal that the Bush "free marketeers" have written up, there will be an unprecedented economic meltdown in the United States and an unraveling of the global economy.

This proposal as presented is an unacceptable attempt to force the middle-income families of the United States to pick up the cost of fixing the horrendous economic mess that is the product of the Bush administration's deregulatory fever and Wall Street's insatiable greed. If the potential danger to the American economy was not so dire, this blatant effort to essentially transfer $700bn up the income ladder to those at the top would be laughable.

Let me be clear. If the economy is on the edge of collapse, we need to act. But rescuing the American economy does not mean we have to just give away $700bn of taxpayer money to the banks. Unlike the Bush administration, I believe any proposal must protect middle-income and working families from bearing the burden of this bail-out. We must not redistribute wealth upward, to the financial houses and banks and the wealthy investors who control them.

I have proposed to my colleagues in the US Senate a four-part plan to fund responsibly whatever bail-out is necessary.

The first part is a progressive and reasonable distribution of fiscal responsibility: a five-year, 10% surtax on the income of individuals above $500,000 a year, and $1m a year for couples; a requirement that the price the government pays for any mortgage assets are discounted appropriately so that government can recover the amount it paid for them; and, finally, a programme to enable the US government to receive equity in the companies it bails out so that when the stock of these companies rises after the bailout, taxpayers have the opportunity to share in the resulting windfall. Taken together, these measures will provide the best guarantee that at the end of five years, the government will have gotten back the money it puts into the bail-out.

Second, in addition to protecting the average American from being saddled with the cost, any serious proposal has to include reforms so that we end the type of behaviour that led to this crisis in the first place, a crisis that has endangered not only the American economy but the world economy. Much of what has gone wrong in the US can be traced to specific legislation that broke down regulatory safety walls in the financial sector, allowing banks and others to engage in new types of risky transactions that are at the heart of this crisis. That era of deregulation needs to be ended. Wall Street has shown it cannot be trusted to police itself. America needs to reinstate a strong regulatory system that protects our economy, and the economies of other nations that invest in American financial instruments.

Third, the US needs to adopt some of the worker-oriented priorities of other nations so that it can address the needs of working families in our nation who are today facing very difficult times – and not just bankers and their partners in fiscal speculation. If we can bail out Wall Street, we need to respond with equal vigour to the plight of American workers and their families. That means, for example, creating millions of jobs through major investments in rebuilding the crumbling infrastructure of the US and in creating a new renewable energy system to address global warming. We must also make certain that we protect more than banks: we must make sure the most vulnerable Americans don't freeze in the winter or die because they lack access to primary healthcare.

Finally, we need to protect the international financial system from being at the mercy of giant companies that are "too big to fail," companies which are so large that their failure would cause systemic harm to either the American or the world economy. We need to assess which companies fall into this category and insist they are broken up. Otherwise, the American taxpayer will continue to be on the financial hook for the risky behaviour, the mismanagement, and even the illegal conduct of these companies' executives. Likewise, those who work in economies interlinked with the US economy – which in our 21st century global economy is every nation – must be protected from disruption because of irresponsible or wrong decisions by corporate executives in a place far from their own.

These are the last days of the Bush administration, the most dishonest and incompetent presidency in modern American history. I believe that is imperative that, at this important moment, the US Congress stand up for the American middle class and for fiscal integrity. The future of the United States, and that of the global economy, is at stake.