Bush to meet economic team after bailout rejected

WASHINGTON (Reuters) - The White House, expressing disappointment on Monday with the House of Representatives' rejection of a financial bailout plan, said President George W. Bush would meet his economic team to determine further steps and contact congressional leaders.

"There's no question the economy is facing a difficult crisis that needs to be addressed," said White House spokesman Tony Fratto, who two hours earlier had predicted the legislation would pass.

He spoke to reporters again after the House rejected by a vote of 228-205 a Wall Street bailout bill that would have authorized the Treasury Department to spend up to $700 billion to buy broken mortgage-backed bonds from banks with the goal of jump-starting stalled capital markets.

"We're very disappointed in the outcome," Fratto said after the vote, which sent markets tumbling further.

"The president will be meeting with his team this afternoon to determine the next steps and will also be in touch with congressional leaders," he added.

Before the vote, Fratto said Bush, Vice President Dick Cheney and Treasury Secretary Henry Paulson had been making phone calls to several dozen lawmakers trying to firm up or win over their support.

Numerous members of Bush's own Republican party in the House opposed the package, before the vote, because they believed it would be an overly intrusive government intervention in the markets.

The Bush administration failed to bring them in line in time for Monday's crucial vote.

(Editing by Jan Paschal)