WASHINGTON — The White House plan to rescue the nation’s financial system, announced on Tuesday by Timothy F. Geithner, the Treasury secretary, is far bigger than anyone predicted and envisions a far greater government role in markets and banks than at any time since the 1930s.
BANKING RESCUE, REDUX Treasury Secretary Timothy F. Geithner’s speech and testimony drew a lukewarm response.
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CNBC Video: Part I: Geithner Interview CNBC Video: Part II: Geithner Interview 
Today's Business With Jeff Sommer and Floyd Norris 
Treasury Secretary Geithner, center, at the banking committee with Senator Christopher Dodd, right, and Senator Richard Shelby.
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Administration officials committed to flood the financial system with as much as $2.5 trillion — $350 billion of that coming from the bailout fund and the rest from private investors and the Federal Reserve, making use of its ability to print money.
Mindful of previous financial crises at home and abroad that became protracted because governments moved too slowly, Mr. Geithner pointedly criticized the Bush administration for not acting boldly and quickly enough.
But the initial assessment of the plan from the markets, lawmakers and economists was brutally negative, in large part because they expected more details.
Basic questions about how the various parts of the program would work, especially those involving the unsellable mortgages that banks are holding and preventing home foreclosures, were left for another day. Some Wall Street experts criticized the plan for relying too heavily on the same vague solutions proposed by the Bush administration.
The stock market, propped up for weeks on the expectation that Washington would finally deliver a comprehensive rescue plan, dipped almost as soon as Mr. Geithner began speaking in the morning. The Dow Jones industrial average fell 382 points, or 4.6 percent, by the time the market closed. Yields on Treasury bills dropped, indicating a flight from stocks to the safety of government bonds. Asian markets slipped more narrowly.
While traveling in Fort Myers, Fla., President Obama welcomed the news that the Senate voted 61-37 to approve its $838 billion economic stimulus bill Tuesday, but dismissed the market reaction to his bank rescue plan.
“Wall Street, I think, is hoping for an easy out on this thing and there is no easy out,” Mr. Obama said in an interview with ABC News.
Many of the vital details of the program remain unsettled and are the subject of an intense behind-the-scenes debate.
The president himself had built up expectations that the plan would get ahead of the crisis — and not lurch from pillar to post as the Bush administration did last year, often in partnership with the New York Federal Reserve under its then-president, Mr. Geithner.
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