For Paulson, Toughest Part Lies Ahead

The real work for the Treasury Department begins now that the bailout bill has passed, the New York Times writes. Secretary Henry Paulson has less than a month to get a massive asset management firm up and running, and to start pricing the toxic securities that have flummoxed experts. The Treasury is unlikely to buy any of the bad assets before the election.

Paulson—who is being advised by former Goldman Sachs cronies—is overseeing the project until the Treasury names someone to head it. Most of the work is expected to be outsourced, but the department will be hard put to find suitable finance wizards who lack a conflict of interest. The Treasury will also need to make difficult decisions between buying low to protect taxpayers or shelling out more to shore up banks.