ALEX COHEN, host:

The federal government's $700 billion bailout of Wall Street was supposed to soften the impact of the financial crisis. But so far, the first installment of $350 billion has done little to make borrowing easier or to stop banks from paying their executives large bonuses. That's why Treasury secretary nominee, Timothy Geithner, is now working to make sure the rest of the money is better spent. David Cho is covering the story for the Washington Post, and he joins us now. David, you write that Timothy Geithner is trying to broaden the scope of the bailout package beyond Wall Street. What is he doing?

Mr. DAVID CHO (Reporter, Washington Post): Well, he is taking the program that was meant for banks and dedicating a lot of the money to homeowners, to small businesses, to municipalities and to other consumers so that this program won't only be for Wall Street; it will be for a lot of ordinary Americans. But really, I think his thinking here is that the program needs a broad overhaul, and politically, he needs to do that. There is no way he can access the second half of the rescue funds, which total $350 billion, without overhauling this program.

COHEN: But David, wasn't that what the banks were supposed to be doing themselves, getting that money that they were given, to - and lending it out to homeowners, to small-business owners?

Mr. CHO: Yes, exactly. And essentially, they took that money, and a lot of the banks hoarded it. Some actually paid out bonuses to their executives; others paid out dividends to their shareholders. It really angered a lot of lawmakers. There was actually a report out by a congressional oversight committee that criticized the current Treasury for not tracking the money and not forcing banks to lend out this money or for helping homeowners. Geithner is basically responding to those criticisms and doing those very things.

COHEN: So, what's his plan to make sure that the oversight is improved by the Treasury Department?

Mr. CHO: Well, one idea he's considering is to create a separate bureau within Treasury. It would be easier to track the performance of the rescue program if it was separated out from the rest of the Treasury. That's the belief. But in addition to that, they are really thinking about creating whole - entire new programs that would force banks to reveal what they are doing with rescue money as well as support some of the markets that finance credit cards, auto loans, you know, municipal bonds. These are new programs that haven't yet existed.

COHEN: Timothy Geithner is supposed to come up for his confirmation hearings next week. He was previously the president of New York's Federal Reserve Bank. That's where he was lead architect for the bailout for Bear Stearns, AIG, Citigroup. Do you think he's likely to get some heat for that in these confirmation hearings?

Mr. CHO: Oh, for sure. At least my congressional sources tell me they plan to ask a lot of questions about his role in the crisis to this point, and he really faces a conflict here. On one hand, he's trying to give this massive rescue program a fresh start, but he was involved in many of the bailouts for the banks and institutions that received rescue money last year. So, he's going to both have to answer a question about, this is why I did this in the past, and at the same time, convince lawmakers, I'm going in a new direction with this program.

COHEN: David, you write that others in Washington aren't necessarily waiting for Tim Geithner. Barney Frank's got a plan to set conditions on the rest of the bailout funds. Is there a downside to this, to different parties launching their own proposals? Might that slow things down?

Mr. CHO: It's possible, but I don't think so. I think a lot of the Democrats are coordinating their ideas with the Obama transition team, and already, there have been a lot of discussions going on between Geithner and Obama's legislative affairs people with the key members of Capitol Hill. The question is: does the rank and file follow suit with the leadership? If you recall, when the TARP was passing back in September, the leaders thought it was going to pass, and then the House rejected it, and the markets went haywire. I think the Dow dropped something like 700 to 800 points. There really is that risk here, again, of the rank-and-file lawmakers rebelling against leadership and saying, I never liked this program, I don't like how it's working out, and they may vote against it.

COHEN: David Cho is a reporter for the Washington Post. Thanks, David.

Mr. CHO: Sure. Good to be here.

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