WASHINGTON (CNN) -- U.S. President George W. Bush, saying "our entire economy is in danger," urged Congress to approve his administration's $700 billion bailout proposal.

"We're in the midst of a serious financial crisis, and the federal government is responding with decisive actions," Bush said in a televised address Wednesday night from the White House.

Bush pointed out that the collapse of several major lenders was rooted in the subprime mortgage market that thrived over the past decade.

He said passage of the $700 billion bailout proposal was needed to restore confidence in the market.

"I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention," he said. But "these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence.

"Without immediate action by Congress, America can slip into a major panic." Watch Bush warn of the consequences »

If Congress fails to approve the rescue plan, the nation could face a "long and painful recession," Bush said.

"The plan is big enough to solve a serious problem," Bush said.

The plan calls for the government to buy from firms up to $700 billion in troubled assets -- mainly mortgage-backed securities -- whose values declined as the housing market imploded. The goal is to stabilize the companies and prompt them to lend again. iReport.com: How would you spend $700B?

"The government is the only institution patient enough to buy these assets at their current low prices and hold them until their prices return to normal," he said.

Federal Reserve chief Ben Bernanke warned Wednesday that the Wall Street crisis is the worst the nation has faced since the end of World War II and urged Congress to take action on a proposed bailout package.

Congress is considering whether to allow Treasury Secretary Henry Paulson to use federal funds to buy up to $700 billion in mortgage-related securities and other assets that have caused turbulence on Wall Street and have undermined credit markets worldwide.

But Paulson and Bernanke faced deeply skeptical lawmakers, including members of Bush's own party, when they pitched the plan before congressional committees Tuesday and Wednesday. Watch as lawmakers push back »

The White House had been taken a mostly hard line during the negotiations with Congress, but it is signaling a new spirit of cooperation that suggests the administration realizes the situation is so serious that it will have to compromise in order to get something done.

"This is not take-it-or-leave-it," a senior administration official said earlier Wednesday. "We'll accept changes."

The senior administration official said the president has been contemplating a prime-time speech for several weeks but finally decided to deliver it tonight because he believes that the situation has reached crisis stage.

"This is a bullet you only fire once," the senior official said. "We have reached a point in the process where we just have to get action."

CNN's Ed Henry, Elaine Quijano and Deirdre Walsh contributed to this report.

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