Speaking before the Senate Banking Committee Tuesday, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke did their best to urge Congress to act sooner rather than later on their proposed $700 million bailout plan. In separate remarks, both stressed the damage to the overall U.S. economy and impact on American taxpayers should Congress delay action. “The market turmoil we are experiencing today poses great risk to U.S. taxpayers. When the financial system doesn’t work as it should, Americans’ personal savings, and the ability of consumers and businesses to finance spending, investment and job creation are threatened,” Paulson (pictured) said in his prepared testimony. “The ultimate taxpayer protection will be the market stability provided as we remove the troubled assets from our financial system. I am convinced that this bold approach will cost American families far less than the alternative–a continuing series of financial institution failures and frozen credit markets unable to fund everyday needs and economic expansion.” Bernanke testified that, “Notably, stresses in financial markets have been high and have recently intensified significantly. If financial conditions fail to improve for a protracted period, the implications for the broader economy could be quite adverse.” While Bernanke, Paulson, SEC Chairman Christopher Cox and Federal Housing Finance Agency Director James Lockhart were being grilled on Capitol Hill, President George W. Bush addressed the heads of state at the United Nations Tuesday morning and assured them that the U.S. government is working quickly to finish a bailout plan. He said he was “confident we will act in the urgent time frame” needed. Noting that “our economies are more closely connected than ever before,” Bush said the administration and Congress were working together. Meanwhile, White House spokesman Tony Fratto told reporters the administration believes the bailout plan would be completed this week. Those watching the Senate Banking Committee hearing, though, might not be so sure that the plan will be approved quickly. Both Democratic and Republican senators seemed skeptical at times of the massive bailout plan and continued to press for more help for homeowners facing foreclosure and limits on executive compensation. Bernanke and Paulson both expressed frustration at those issues as well and also noted that the outdated regulatory system for financial institutions must be addressed, but at a later time. “The best protection and first protection for the taxpayer is for this to work,” Bernanke stated as he called for the Senate to come to a bipartisan agreement on the bailout plan rather than getting bogged down in “other flaws and excesses” that can’t be addressed this week because they will take time to work out. Asked whether $700 million would be enough to buy up all the bad mortgage loans from institutions, Bernanke said the amount should be adequate and that it represented approximately 5 percent of outstanding mortgages. “If done right, the American people should get good value for their money,” he said. At one point, Bernanke went off his prepared remarks and explained the rationale for buying the assets at hold-to-maturity prices, rather than fire-sale prices. “I believe that under the Treasury program, auctions and other mechanisms could be designed that will give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets,” he said. “There are substantial benefits to buying assets at a cost close to the ‘hold-to-maturity’ price.” Paulson explained that a reverse auction would be one way to handle sales of the illiquid assets, but added that different auction techniques will be needed for various asset classes, such as mortgage derivatives and mortgage-backed securities. He said that is the reason why they asked for “broad flexibility” in the bailout plan, because different approaches would be needed. Also Tuesday, appearing on several network morning shows, Sen. Hilary Clinton, D-New York, expressed concerns about giving the Treasury a “blank check” to deal with the financial crisis and also said she wanted to see relief for homeowners, particularly those who may have fallen prey to predatory lenders. Investors, apparently picking up on the concerns of Congress, sent the market down in the early afternoon, after it had been increasing slightly while Bernanke and Paulson first began their testimony before the Senate committee.Bernanke and Paulson are due to appear Wednesday before the House Financial Services Committee, where Republicans are expected to propose an alternative to the Paulson plan. No details were released Tuesday. But Republican and Democratic House members were also raising concerns about the plan. Republican Representative Darrell Issa of California said he was “emphatically against it,” according to The Associated Press. Others like GOP Representative Joe Barton of Texas said they did not want to be pushed to make a quick decision. But House Speaker Nancy Pelosi told reporters that a compromise could be coming soon between House Financial Services Chairman Barney Frank and Paulson about oversight of the Treasury and the plan as well the CEO compensation issue, according to Bloomberg News. Meanwhile, Democratic Senator Charles Schumer of New York Tuesday suggested breaking the bailout into tranches of $50 billion to $150 billion at a time, noting that Congress could always return to authorize additional asset sales if needed. When Schumer asked Paulson about the proposal during the hearing, Paulson responded it would be a “grave mistake” and wouldn’t do enough to restore confidence to the financial markets.