You don't think that the Bushies actually care about fixing a problem they've created do you?
By putting up such a ridiculous proposal, Bush is baiting the Congress to reject it so that he can force the Democrats (and Obama) to come up with their own plan on the fly in the middle of a presidential election.
How do we know this? Look at the timetable. Paulson's proposal comes right before Congress leaves town and just days before the first debate. They are looking for an opening, waiting for Obama or one of the key Dem leaders to slip up and say something stupid over the next few days so that they can play "gotcha" at the debate and try to get Obama either to reverse a position, speak against his own party, or to support Bush's plan (which would mean certain defeat on Election Day).
But this is even a bigger gambit than just playing "gotcha" with Obama. Bush is trying, in spite of his own abysmal approval rating, to re-brand the Republican Party as "champions of the middle class against elitists on Wall Street", evidenced by the fact that McCain, Palin, and most Republicans hate the Bush/Paulson plan. They are capitalizing on the Democrats' knee-jerk reaction to be responsible in a cynical, Hail Mary pass to save their party.
That's all this is... Rove 101.
How to beat it?
The Dems reject Bush's proposal and float their own... a "bridge loan" to stop any further economic damage and protect the treasury. They then form some new committee and a blue-ribbon commission and pack it chock full of liberal economics professors, businessmen, and captains of industry who will be charged with proposing a "nonpartisan, fact-based solution that protects American taxpayers". That gets us past Election Day and it mutes any charges of a "Do-Nothing Congress" from the White House.