With Congress stalled on a bailout plan, Republican nominee John McCain urged President Bush on Tuesday to direct the Treasury Department to use powers already on the books to increase insurance of bank deposits and buy troubled mortgages.

“The administration can take these actions with the stroke of the pen to help alleviate the crisis gripping our economy,” McCain said. “I urge them to do so.”

He also called for the Federal Deposit Insurance Corp. to increase the deposit insurance cap to $250,000, more than double the current level. The move would seek to assure nervous savers that their money is safe from a bank failure.

“We cannot allow a crisis in our financial system to become a crisis in confidence,” McCain said.

McCain addressed the financial turmoil as he opened an economic roundtable discussion with business leaders at a north Des Moines concrete form business. He said he spoke with Bush earlier Tuesday and urged the president to take action.

He acknowledged the politics of an approaching election could complicate efforts to deal with the nation’s economic problems.

“I know that many of the solutions to this problem may be unpopular, but the dire consequences of inaction will be far more damaging to the economic security of American families and the fault will be ours,” McCain said.

He argued that the Treasury Department has already used a special fund to back money market accounts, and he urged that its use be broadened.

“I encourage it to use this fund as creatively as possible to provide backstops for accounts across our financial system to maintain confidence on the part of savers and investors,” said McCain.In addition, McCain said a housing bill approved in Congress gives Treasury the authority to purchase up to $1 trillion in mortgages, and the agency should do so.

“Housing and mortgages are at the root of this crisis,” McCain said. “I encourage Treasury to take action to shore up mortgage values.”

A day after Congress rejected a $700 billion bailout package Bush had supported, McCain said the size of the problem demands immediate action.

“We are in the greatest financial crisis of our lifetime,” said McCain. “Congressional inaction has put every American and the entire economy at the gravest risk.”

McCain also called for Democrats and Republicans to work together.

“I am disappointed at the lack of resolve and bipartisan good will among members of both parties to fix the problem,” said McCain. “Bipartisanship is a tough thing, never more so when you’re trying to take necessary but publicly unpopular actions. But inaction is not an option.”

McCain warned that the credit market is beginning to dry up for businesses, those seeking to buy a home and students looking to finance an education.