Testifying for a second day before the Senate Budget Committee about the plan he sketched out yesterday to save the banking sector, Tim Geithner promised to inform Congress as quickly as possible if more taxpayer money is needed. He said a supervisory review of banks -- a so-called "stress test" -- would help determine that. It's likely the stress tests will show the banks are in far worse shape than Geithner's plan can deal with. But it seems doubtful Geithner will return to the well any time soon. Neither Republicans, Blue-Dog Democrats, or progressive Democrats like the idea of bailing out Wall Street -- and revelations about Wall Street's malfeasance, misfeasance, and just plain stupidity over the last few years are likely to multiply in the weeks and months ahead.

So far, the Geithner plan requires no new money beyond the remaining $350 billion Congress has already okayed to bail out Wall Street. But in truth, the plan assumes trillions more from the Fed, based on the Fed's seemingly infinite capacity to backstop almost anyone putting up almost any collateral.

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CEOs of the nation's largest banks and financial institutions faced Congress today, defending how they used almost hundreds of billions in taxpayer bailout money. Members of the House Financial Services Committee wanted to know why the executives paid executive bonuses, bought corporate jets, put on parties, arranged employee junkets, and richly rewarded their shareholders with dividends, rather than lend the money to Main Street. Committee Chairman Barney Frank told the bank executives there was "a great deal of anger" across the country.

Anger, yes. Indeed, the hearing was something of a perp walk. But the pertinent question is what Congress will do to make sure Geithner's new plan for using more of the bailout money doesn't allow bank executives to do much the same, through back doors and loopholes.

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The tab may be close to $2 trillion. But what, exactly is the plan? We still don't know.

Geithner has to raise confidence among two groups: (1) the public, enough to allow the administration to use the second $350 billion Congress has already authorized without too much hollering on Capitol Hill; and (2) investors, sufficiently to get them to buy the banks' toxic assets (with guarantees from the Treasury and loans from the Fed limiting the investors' downside risks), and to buy new securities that will finance future loans to consumers, small businesses, and homeowners (also with some federal guarantees and loans limiting downside risks).

At this stage, (1) will be far easier to accomplish than (2).

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Why are Senate Republicans (all, that is, except the lonely moderates Collins, Snowe, and Specter) nixing the stimulus package, as House Republicans did? Not because Obama failed to compromise -- he gave them the tax breaks they wanted, included a whopper for business. Not because Senate Democrats failed to bend -- they agreed to trim more than $100 billion out of a previous version of the bill. Not because Senate Republicans are doctrinally opposed to deficit spending -- many of them happily voted for Bush spending and tax cuts that doubled the federal debt.

The reason has to do with the timing of the economic recovery. If everything goes as well as possible and the stimulus and next round of bank bailouts work perfectly, a turnaround could begin as early as mid-2010. But even under this rosy scenario, employers wouldn't start rehiring until late 2010 because they'll want to be sure the upturn is for real (employment typically lags in a recovery). This means that under the best of circumstances -- assuming the stimulus is big enough to jump-start the economy and the next bank bailout big enough to get credit moving -- most Americans won't feel much better than they do now by November, 2010. Unemployment could easily be hovering close to 8 percent; underemployment, close to 14 percent; and many other indicators, still in the doldrums.

That's if all goes extremely well.

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