NEW YORK (CNN/Money) - Confronting the accounting scandals that have crippled investor confidence, President Bush called Tuesday for a crackdown on corporate wrongdoing, saying the nation's economy and financial systems depend on it.

"With strict enforcement and higher ethical standards, we must usher in a new era of integrity in Corporate America," Bush said in a speech delivered to a business group just blocks from the New York Stock Exchange and Ground Zero. "In the end, there is no capitalism without conscience, no wealth without character."

The president's proposals included lengthening jail time for criminal fraud by corporate officers and directors, doubling the maximum jail term for mail and wire fraud to 10 years, toughening laws criminalizing corporate document shredding, and preventing corporate officers from receiving company loans.

"We will use the full weight of the law to expose and root out corruption," Bush said. "My administration will do everything in our power to end the days of cooking the books, shading the truth and breaking our laws."

Bush's speech was designed in part to refute critics who have called him too cozy with Corporate America -- particularly Democrats who, in a congressional election year, seem unlikely to cut him much slack, especially after raising questions about his own past business dealings.

The speech, which the administration had been advertising for weeks in advance, came a day after the president held an impromptu news conference and was forced to defend his sale of stock in Harken Energy 12 years ago.

Democrats took Bush to task Tuesday for failing to support reform legislation pending in the Senate sponsored by Sen. Paul Sarbanes, a Maryland Democrat, saying Bush's proposals didn't go as far as Sarbanes' in protecting corporate whistleblowers, employees and investors.

"I'm gravely disappointed today that the president had a chance to embrace positive movement to secure the economy, restore confidence and protect investors and pensioners in the years ahead," Sen. John Corzine, D-N.J., said at a news conference on Capitol Hill in Washington. "Instead, we had a rehash of what's obvious and already in the system."

And Wall Street reacted just as skeptically, with U.S. stock prices falling sharply. Several analysts said Bush's speech did little to inspire confidence or address permanent reforms, and they didn't think confidence would be restored until they saw real action to punish the rule-breakers and fix the system.

But Bush did announce some new proposals and initiatives, including the creation of a Corporate Fraud Task Force to manage fraud investigations and prosecution and coordinate enforcement activities between agencies. The group will hold its first meeting in 10 days, the Justice Department said.

He also called for Congress to immediately approve a $20 million boost to the Securities and Exchange Commission's budget this year and $100 million more for 2003 to hire new officers and improve technology -- a 20 percent budget hike for the SEC in 2003.

"There are more scandals hiding in Corporate America," the president said. "We must find and expose them now so we can begin rebuilding the confidence of our people and the momentum of the markets."

Though Bush said the SEC has ordered leaders of 1,000 companies to certify that the financial information they submitted in the past year was fair and accurate, he also said most U.S. businesses had integrity, and he called on CEOs and business schools to set a tone for others.

"Responsible business leaders do not jump ship during hard times ... do not collect huge bonuses when the value of their company dramatically declines ... do not take on tens of millions of dollars in compensation as the company prepares to file for bankruptcy, devastating the holdings of investors," he said.

Bush also called for Wall Street analysts to be trusted advisors instead of salespeople.

"The advice analysts give and the terms they use [should] have real meaning to investors," he said. "'Buy' should not be the only word in an analyst's vocabulary, and they should never say 'hold' when they really mean 'sell.'"

President Bush proposes stricter accounting oversight and doubling jail time for corporate fraud. Play video

But New York state Attorney General Eliot Spitzer, who has been on a public campaign to reform Wall Street analysis, wasn't satisfied with that.

"Today President Bush acknowledged that conflicts of interest by securities analysts are a major problem, but he did not articulate a solution," Spitzer said in a statement. "Instead the president hid behind a weak House proposal addressing corporate accountability and wholly inadequate SEC rules that were promulgated months ago.

"The president today missed an important opportunity to help restore investor confidence," he said.

Bush, embattled SEC Chairman Harvey Pitt and others in the administration have toughened their rhetoric about making companies toe the line in the wake of almost daily revelations of corporate accounting scandals such as those at WorldCom (WCOME: down $0.02 to $0.21, Research, Estimates) and Enron.

Bush's speech reiterated much of the 10-point plan for corporate governance he proposed in March, including calls for executives to be forced to return money they gain from fraud and banning rule-breakers from future leadership positions.

In one of the most significant aspects of his plan, Bush called for an independent regulatory board to oversee the accounting profession, an idea that has rapidly gained steam in other quarters. Citigroup CEO Sandy Weill called for one in a speech Monday night.

Such a board was the centerpiece of separate bills by Sarbanes and Rep. Michael Oxley, R-Ohio. Oxley's bill passed the House in April, and Sarbanes' bill came up for discussion in the Senate this week.

Some legislation creating an independent accounting board likely will be passed, political observers said, though the process could take several weeks -- perhaps not soon enough to address nervous investors, who have kept stock prices low and markets volatile despite signs of an economic recovery.

"Most importantly, we have to restore faith in the auditing function," Business Roundtable President John Castellani told CNN anchor Paula Zahn. The Business Roundtable is a group of CEOs that has supported efforts by Bush, the SEC and Congress to rein in corporate fraud. "It has to be credible and independent, something investors can trust."

In his speech, Bush called for companies to move beyond minimum standards when making their financial reports, which he said should be "written in a straightforward, easily understandable form."

Bush has been hounded by fresh reports that he sold stock while he was a director of Harken Energy Corp. (HEC: Research, Estimates) in 1990 shortly before the company announced a big loss that drove its stock sharply lower. In a hastily arranged news conference Monday night, Bush said his sale of stock was reviewed fully by the SEC, that no wrongdoing was found and that his political opponents were simply trying to drag up old news to make hay in a congressional election year.

Some political analysts said Bush's calls to crack down on corporate evildoers could drown out such charges and end up being a political windfall for him, even if it distracts him from some of his pet projects.

"What else would he be talking about? Education? Social Security? A trade bill nobody cares about?" asked Les Alperstein, a political analyst with Washington Analysis. "This is an opportunity for him to get out in front on a big issue and lead. It could be a plus for him."