WASHINGTON - Rep. Peter DeFazio, D-Ore., proposed a ``low cost, no cost'' approach Tuesday that he said would stabilize the nation's wounded financial system and give Congress time to construct a more permanent solution that protects taxpayers and insulates banks, businesses and citizens from potential financial ruin.

DeFazio's approach pivots on several administrative and accounting changes that he and his allies say would stabilize the tottering financial system, make it easier for banks to make loans and restore confidence in the economy.

``What I'm proposing is to use both market discipline and regulatory functions at virtually no cost to taxpayers to unclog the arteries of commerce so banks can begin lending again,'' DeFazio said at a news conference flanked by six other Democrats.

``The President has substantial powers to do that without legislation and it appears we may have to force him to use his power,'' said DeFazio, who added that several Republicans have expressed support for plan.DeFazio said the individual pieces of his plan can be executed quickly and would have an almost immediate positive effect on the markets. That would buy time for the administration and Congress to devise more thorough solution that fixes the economy's underlying problems.

Among DeFazio's proposals:

-- Force the Securities and Exchange Commission to change the way mortgage securities are valued. Current rules set the value too low because the 75 percent of good loans are not reflected in the market price, DeFazio said. That creates ``a capital shortfall on paper. The bill would require the SEC to alter rules so the strong loans could be priced separately.

-- Ban short selling of stocks. This is the complicated and highly speculative practice of ``selling'' stock at a lower price before actually taking ownership. ``Such practices many times harm the companies represented in the sales and hurt their efforts to raise capital.

-- Increase the FDIC insurance limit on deposits from $100,000 per individual to $250,000. This idea earned broad support Tuesday, including positive response from the White and from presidential candidates Sens. Barack Obama and John McCain.

DeFazio, who has been a strident critic of the bi-partisan deal that would have provided Treasury Secretary Henry Paulson with $700 billion to buy bad mortgages and hopefully prevent financial institutions from failing, said the primary goal is to prevent a new version of that plan from moving forward.

Meanwhile, Rep. Greg Walden, R-Ore., who voted for the bailout, said it will be difficult to push any bill through Congress.

``I think it gets tougher from here, frankly. I don't know which way it will go,'' he said in an interview.

``Maybe the President just ends up cutting a deal with the Democrats figuring there are more votes to get there than on our side. I think it's a very difficult position right now. I'm not sure what other tweak you do in the bill that gets you the votes,'' he said.

Jeff Kosseff contributed to this report.

Charles Pope; charles.pope@newhouse.com