Sept. 21 (Bloomberg) -- Treasury Secretary Henry Paulson said financial markets are ``fragile'' and urged the U.S. Congress to pass his $700 billion proposal to use public funds to buy bad mortgage investments to avert a credit freeze.

``The markets are fragile,'' Paulson said on the ``Fox News Sunday'' program. ``We have a serious situation.'' Speaking on NBC's ``Meet the Press,'' the Treasury chief said, ``this is not a position where I like to see the taxpayer, but it is far better than the alternative.''

Paulson yesterday asked Congress for unhindered authority to buy devalued mortgage-related securities from investment firms in an effort to keep the financial system from coming to a standstill. The proposal would prevent courts from reviewing the Treasury's actions while raising the nation's debt ceiling to $11.315 trillion from $10.615 trillion.

Appearing on several morning talk shows, Paulson said on ABC's ``This Week'' that ``this is a humbling time'' for the U.S., and argued that the ``ultimate cost'' of his plan would be below the $700 billion he is asking for.

``This is something that has to work; I very much believe it will work,'' he told ABC.

Congressional Democrats want to use the plan to curb executive pay for U.S. financial companies, spur the economy with infrastructure spending and help people avoid foreclosures, setting the stage for a possible fight with Republicans and the Bush administration.

Mortgage Relief

Paulson said that, while the bill should also include ``mortgage relief components,'' legislation needs to be passed soon. ``We want this to be clean, we want this to be quick,'' he told Fox News. He said on ABC that most foreclosures are due to homeowners who either ``don't want to stay in their home and live up to their obligations,'' or can't afford to remain because of ``irresponsible lending practices.''

On Fox, the Treasury chief said he will urge other countries to take action as needed to address problems with their financial institutions.

``I'm also going to be pressing our colleagues around the world to design similar programs for their banks and institutions when they are appropriate,'' Paulson said.

The Treasury last week tapped all $50 billion in the country's Exchange Stabilization Fund to insure money-market mutual fund holdings, and the Federal Reserve expanded lending to commercial banks. The measures were aimed at supporting credit markets teetering on the edge of collapse, as investors pulled a record $89.2 billion from money-market funds Sept. 17.

That danger justifies the authority the government is asking for, Paulson said.

``That is why we need these powers,'' he said on ``Meet the Press'' program. ``This is why Congress needs to move quickly.''

To contact the reporter on this story: John Brinsley in Washington at jbrinsley@bloomberg.net

Last Updated: September 21, 2008 12:07 EDT