Paulson, Bernanke Defend $700 Billion Bailout

Updated from 3:25 a.m. EST

By Jeannine Aversa

WASHINGTON -- Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke waged a stout defense on Capitol Hill on Tuesday of their management of a $700 billion financial bailout just one week after the administration abandoned the original strategy behind the rescue.

Focusing the program on infusing billions into banks -- and possibly other types of companies -- to pump up their capital and bolster lending to customers was deemed a faster and more effective approach to stabilizing the financial system than buying rotten assets from financial institutions, the centerpiece of the original plan, Paulson said. ...