Presumably, if there is some kind of bidding process, those limitations, over which the secretary also has considerable discretion, will not apply. However, institutions that receive $300 million or more from the program would face limitations on executive pay.

One of the most important decisions the secretary will make is the price the government pays for securities. Here again, there is wide discretion. He is directed to “make such purchases at the lowest price” that is “consistent with the purposes of this act.”

Those purposes, however, are expansive and leave him room to pay well over the lowest price available if he wishes to do so. The act is designed to “restore liquidity and stability to the financial system of the United States” and protect homeownership, home values and economic growth. If he concludes that a higher price is needed to provide stability in the financial markets, that is evidently acceptable.

When the Bush administration submitted its original proposal, there was an uproar over the lack of oversight of the secretary’s actions. This bill requires frequent reports to Congressional committees, including a Congressional oversight panel; audits by the comptroller general; and appointment of an inspector general for the program.

The bill also sets up an oversight board, which is directed to “ensure that the policies implemented” by Mr. Paulson are proper. Mr. Paulson is to be one of the five members of the board watching over his actions, joined by the chairman of the Federal Reserve, the chairman of the Securities and Exchange Commission, the Housing Secretary and the director of the Federal Home Finance Agency.

If Mr. Paulson wishes to use his authority to buy financial assets not linked to mortgages, he can do so after consulting the Fed chairman. But he does not need the approval of the Fed chairman or the oversight board.

The bill does allow legal challenges, but attempts to assure they are quickly handled and that the most important decisions can be challenged only on constitutional grounds, not on the ground that they conflict with some other law.

While the bill does not drop the accounting rule that requires banks to report on the market value of their assets  a rule that some banks believe has forced them to report excessive losses  it gives the S.E.C. permission to suspend the rule for any individual company if it thinks that is in the public’s interest. That is likely to lead to intensive lobbying of the commission.