Washington  - The stock markets are in free fall. Congress is in chaos. The White House is helpless.

After Monday's rejection by legislators of the rescue package for the battered financial sector, the United States is on the brink of its worst economic crisis since the catastrophe of 1929.

"If Congress doesnt help us on this, heaven help us," said legendary multibillionaire investor Warren Buffet last week.

And Congress balked.

Five weeks before presidential and congressional elections in the United States, the superpower appears to be lunging headlong into a certain recession, the conservative Wall Street Journal warned.

The Daily News included in its list of "losers galore in the bail-out debacle" Republican US President George W Bush and House of Representatives Speaker Nancy Pelosi, a Democrat.

Congressional leaders clearly miscalculated the support for the bill, which went down 228 to 205 in Monday's catastrophic rejection of Bush's 700-billion-dollar bail-out plan for the financial system. Politicians in Washington hid behind a mountain of mutual accusations, but almost all must feel like "losers" on Tuesday.

Bush and his Treasury Secretary Henry Paulson could not get the House of Representatives to pass the bill, for all their dramatic gestures and words. Paulson last week even knelt before Pelosi in a mock plea that she not scuttle a fragile tentative agreement, media reports said.

Bush, who reportedly has used uncharacteristically strong swear words in some of the crisis summits, has for seven straight days begged, pleaded and cajoled Congress and the American public like a broken record: bite the bullet and support the plan.

"The reality is that we are in an urgent situation, and the consequences will grow worse each day if we do not act," Bush said Tuesday.

The leaders of the Democrats and Republicans were stunned at the loss as extreme liberals and conservatives joined ranks to kill the plan.

Conservatives with blind faith in the market were fearful that voters might penalize them in the upcoming elections if they agreed to the unpopular bail-out of Wall Street with tax money.

Republicans were greatly annoyed by Pelosi's strong words shortly before the final vote. She blamed the Bush administration's "budgetary recklessness" and lack of regulation, supervision and discipline on Wall Street for the crisis.

Far-left Democrats felt the bill did not go far enough in helping homeowners struggling to keep a roof over their heads as bad mortgage assets and securities drain the system dry of credit.

Legislators received so many protest e-mails from voters that system administrators had to restrict intake to prevent the system from crashing, The Hill newspaper on Capitol Hill reported Tuesday online.

Even in July, public confidence in Congress had sunk to 14 per cent, and the chaos of the past two weeks certainly has not helped.

The Washington Post noted on its editorial page that a political establishment held in higher regard "might have been able to hold together some kind of coalition of the willing."

"But distrust of the nation's leaders, from the leaders of Congress to the president of the United States, foreclosed that possibility," it concluded.

The Republican presidential candidate John McCain was mocked by liberal broadcast analysts for suspending his campaign and rushing to the rescue in Washington last week, only to have his own party ignore his calls for support of the plan.

McCain in turn blamed his rival Barack Obama and his Democratic allies in Congress for infusing the process with "unnecessary partisanship" - an ironic charge, given that Obama opposed getting involved last week to spare Capitol Hill the confusion of presidential politics.

McCain also blamed Obama for staying on the sidelines.

Obama, whose strong suit is domestic and economic politics, seems to be the only one who could still possibly profit from the current confusion in Washington. But even he was unable to round up enough Democrats to get the rescue plan through.

"Democrats, Republicans, step up to the plate, get it done," Obama demanded of legislators.

All of this is background to the much-anticipated debate Thursday evening between the vice presidential candidates, Democratic Senator Joe Biden and Republican Governor of Alaska Sarah Palin.

Palin's inexperience on the national stage produced a disastrous interview last week with CBS News' anchor Katie Couric, when she said she had foreign policy experience because Russian leader Vladimir Putin flew through her state's airspace on his way to the US.

Palin's remarks have made her a national laughing stock and even hardline conservative columnists like the National Review's Kathleen Parker have called for her to step out of the race. (dpa)