WASHINGTON — Democratic congressional leaders urged President Bush on Monday to do more to address the housing woes at the root of the spreading economic crisis, and criticized him for opposing measures to help struggling homeowners.

With the Federal Reserve rushing to prevent an economic meltdown, Democrats were pushing a laundry-list of proposals _ all rejected by Bush _ to help homeowners avoid foreclosure and bolster financial markets.

Senate Majority Leader Harry Reid said the central bank's actions in the last few days "appear to shift large risks to taxpayers, who may find themselves on the hook for billions in worthless securities."

"Now that the president has shown his willingness to bail out Wall Street at taxpayer expense, I hope he will drop his opposition to proposals designed to help ordinary homeowners by giving them the same bankruptcy protections available to other Americans," Reid, D-Nev., said in a statement.

Democratic Sen. Barack Obama urged the government to cut middle-class taxes to ease the growing economic instability, as he and presidential rival Sen. Hillary Rodham Clinton criticized Bush for failing to take the lead in addressing the nation's economic woes.

Their criticisms were a fresh sign that the economy, which now tops voters' list of concerns, has become a central election-year issue for Democrats, who are offering populist plans that address the public's anxiety.

"While there is no quick fix to repair our struggling economy, more must be done to begin to reverse the economic mismanagement of the past seven years," said House Speaker Nancy Pelosi, D-Calif. "In contrast to the president, we believe that further decisive action is needed now."

Pelosi said Congress should consider extending unemployment and food stamp benefits and sending aid to strapped states _ all measures dropped from the stimulus bill Bush signed last month that will send $600-$1,200 rebates to most taxpayers.

"Our economy is in a shambles," Obama said at a town hall meeting at a community college near Pittsburgh. "This economy is contracting, it is heading toward recession. We probably already are in one."

Besides calling for middle-class tax cuts this year, he hinted that he might reconsider his call to roll back Bush tax cuts on capital gains and dividends if market conditions continue to deteriorate.

Clinton, meanwhile, told reporters in Washington it was a time of economic "stress and uncertainty" and said there was "urgency to continue the action that was started yesterday."

The comments came after the Federal Reserve approved a $30 billion loan for a $2-a-share takeover by JPMorgan Chase & Co. of Bear Stearns & Co. to help keep the stricken investment bank _ one of the nation's largest _ from collapse. The Fed also lowered the rates it charges to lend directly to banks by a quarter-point, following moves last week to lend $100 billion in cash to banks and $200 billion in government bonds to cash-strapped Wall Street investment banks.

"I'm not going to second guess the Fed," Clinton said. She complained about Bush's handling of the problems.

"Now we are in the soup and we better get ourselves out of it before the consequences get drastic," Clinton said.

Obama derided Bush for suggesting that the stimulus package should be given a chance to work and that policymakers shouldn't overreach. He said the Fed might have limited ammunition left and urged steps to deal with the human consequences.

"Real people are losing their homes or at risk of losing their homes. Businesses can't get the credit they need to keep their doors open. My approach would be to be pragmatic," Obama said.

Democratic lawmakers said they wanted to make sure ordinary people benefit from any financial rescue.

"We must make certain that the Main Street economy, not just the Wall Street economy, remains robust, for the sake of America's working families," said Sen. Max Baucus, D-Mont., the Finance Committee chairman.

Sen. Chris Dodd, D-Conn., chairman of the Banking Committee, said the Bear Stearns collapse had boosted the chances that he and Rep. Barney Frank, D-Mass., the House Banking chairman, will be able to push through legislation that would allow the Federal Housing Administration to insure certain refinanced mortgages.

Dodd said he had consulted with Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke throughout the weekend.

"I think there's a greater receptivity to this idea than there was 48 hours ago," Dodd told reporters.

Other Democrats were scathing in their criticism of Bush.

"The red phone is ringing at 3 a.m., and the president's not picking it up," said Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee. "When it comes to housing, particularly, the administration's been a day late and a dollar short."

Congress is on a two-week break, but when lawmakers return Senate Democrats will try to overcome Republican objections and pass their housing package, including a measure that allows bankruptcy judges to adjust mortgage rates.

Bush criticized the proposals Friday, saying, "It's important not to overcorrect."

As senator from New York, Clinton has received the most money from employees of large Wall Street firms. Bear Stearns employees have given her the most, with total donations of $152,000. Likely Republican nominee Sen. John McCain received $47,000 from Bear Stearns employees and Obama got $36,000.

Obama is the biggest recipient of donations from JPMorgan employees, receiving $270,000 to Clinton nearly $200,000. McCain received more than $60,000. According to McCain's latest personal financial disclosure report, his wife and dependent children had between $3 million and $7 million invested in JPMorgan financial instruments.

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Associated Press writer Julie Hirschfeld Davis contributed to this report.