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WASHINGTON, Sunday (AFP, Reuters)

US President George W. Bush and congressional Democrats took to the airwaves Saturday, each to present the solutions to corporate scandals that will likely define a partisan showdown in Congress.

Bush, in the face of falling popularity and questions about his own conduct as an entrepreneur, used his weekly radio address to argue for higher penalties under the laws already on the books, while Representative David Phelps of Illinois presented the Democrats' response of tighter regulations.

Each promised his plan would ensure prosperity.

"Perhaps the greatest need for our economy at this moment is restoring confidence in the integrity of the American business leaders," Bush said.

"I support the creation of a strong, independent board that will provide effective oversight of the accounting profession," Bush said.

"This week, I announced new steps my administration is taking to crack down on corporate fraud. I proposed doubling jail time for financial fraud. I am creating a new task force at the Justice Department to aggressively investigate corporate crime," Bush said. He asked Congress to increase spending for the Securities and Exchange Commission by 100 million dollars.

Bush found new urgency to the problem after his speech Tuesday on the matter garnered a lukewarm reception. The dollar dropped and the Dow Jones industrial average fell throughout the week and remained below 9,000 as Democrats grabbed the initiative. "This is a debate between those who are opposed to real reform and those who believe that strong initiatives are the appropriate response to the current crisis," said Phelps, reprising the Democrats' theme, "Wall Street versus Main Street."

"There are a lot of small businesses and small companies in Southern Illinois that play by the rules, treat their employees fairly and work to promote the best interest of the company, not the CEOs," Phelps said.

"Why should large corporations and corporate officers not have to live by the same rules of honesty as the small businessman?"

Bush's overall approval rating slipped to 68 percent from 70 percent amid the corporate scandals in an opinion poll Newsweek magazine made public Saturday.

While 51 percent approved of the way the president has responded to recent business scandals, 32 percent disapproved.

Vice President Dick Cheney may also be called to testify in court after being named in a lawsuit filed by a government watchdog group, Judicial Watch.

Bush's proposal would ban corporate loans to officers. Democrats wasted no time pointing out that he had received such a loan as director of Harken Energy Corporation.

Meanwhile leaders of a task force created by U.S. President George W. Bush to fight corporate fraud pledged to pursue white collar criminals aggressively as the White House dismissed a week of questions about Bush's own history as a businessman.

The president has been criticized for low-interest loans he received more than a decade ago from an oil company where he served as director.

"After a week of noise about nothing, people are seeing a scandal-seeking Washington that's out of touch with a solution-seeking nation," said White House spokesman Ari Fleischer.

In the Oval Office, Bush met with the head of the new task force, Deputy Attorney General Larry Thompson, and Harvey Pitt, the embattled chairman of the Securities and Exchange Commission, who himself has been criticized for having too cozy a relationship with the industry he regulates.

A series of financial scandals have sunk investor confidence in publicly traded stocks and rocked markets around the world. They threaten to become a political liability for the president as Democrats seek to use the issue against him and Republicans with mid-term elections coming up in November.

Thompson said after the meeting that there are a number of corporate investigations under way, some public, but most confidential.

"We have hundreds of career prosecutors involved in these investigations, professional and dedicated prosecutors. We are going to pursue these matters with vigor and in an aggressive manner, as they should be," he told reporters.

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