Welch Applauds GE Moves

Former General Electric Chairman and Chief Executive Jack Welch appaulded the company's decision to suspend its stock buyback plan in order to maintain its "AAA" credit rating.

"From my standpoint as a shareowner, and I am a shareowner, I love this move," Welch told CNBC. "This company is doing quite well in this environment. They're going to make $8 billion in financial services, more than any other financial-services company, and they're not out with a cup. They did this all inside."

Earlier Thursday, GE , the parent of CNBC and CNBC.com, cut its earnings outlook and halted its buyback plans because of the turmoil in the financial services market, where it has typically made nearly half of its profit.

Welch sees harsh things ahead on the national economic horizon

"We are about to enter the toughest environment that I have ever seen," Welch said. "The market environments across every industry, this thing is slowing; it's going to be a GDP that will be flat in the third quarter...and in the fourth quarter, we have a danger of a real precipitous decline."

He emphasized the need for Congressional action on the $700 billion national financial package.

"If this stays hung up, the risk of this thing staying frozen, and the risk of real trouble occurring is very, very high," he said.

Welch praised Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and New York Federal Reserve Bank President Timothy Geithner for their handling of the crisis.

"Paulson, Bernanke, and Geithner deserve every accolade we can possibly give them," he said. "This is an incredible job. They are not letting ideology box them in. They are trying things, when they don't work, they are moving on to another one. They've been flexible."