DES MOINES -- U.S. Sen. Tom Harkin on Thursday cautioned Congress against being "stampeded" into a massive bailout of the nation's financial system.

His concerns came as an Iowa legislative leader said he was worried that a severe economic downturn could hurt a state budget already under pressure.

"If there's a decision made not to do something, we could have a very wide recession," said House Speaker Pat Murphy, D-Dubuque. "It depends on the bailout."

In a conference call with Iowa reporters, Harkin called for congressional leaders to take a long look at a proposed $700 billion bailout plan and avoid being rushed into action. The pressure to move quickly, he argued, is intended to avoid scrutiny of the plan's details.

"There's no doubt in my mind we are being stampeded," said Harkin. "It's sort of like a self-fulfilling prophesy. I'm telling you, this thing doesn't smell right."

State tax collections are closely linked to economic conditions, and Murphy said there are worries that a downturn could dent a state budget already under pressure because of this year's record flooding.

Murphy said it's too soon to tell what the financial impact will be. And he noted an upside to the crisis -- people now have a better understanding of financial markets.

"We need to make sure people understand different kinds of financial instruments," said Murphy. "We've been talking about financial literacy."

For his part, Harkin promised to avoid a rush to judgment on a bailout package that some expect to come up for a vote this week.

"It would be extremely unwise for the Senate to be railroaded into passing a flawed bill," Harkin said. "We need a bill that is both rescue and reform. It is time for us to take a deep breath, sit back and do it right."

"My office is deluged with calls from Iowans who are outraged by this bailout," said Harkin. "They know that nobody is going to bail them out if they make reckless investments."

Iowa Republican Sen. Charles Grassley said he's also heard plenty from Iowans, many of whom are worried about payouts to executives at failed companies.