"We need to move very aggressively to get our financial system back to the point where it's providing the credit necessary for recovery," Geithner said.
He said he is confident that investors will want to be involved but suggested Washington needs to provide more certainty for potential investors.
"For these programs to work, investors have to take risk," he said. "For them to take risk, they have to be more confident than they are today that there are going to be a clear set of rules of the game applied consistently and enforced fairly going forward."
President Obama, after meeting with Geithner, Fed Chairman Ben Bernanke and FDIC Chairwoman Sheila Bair at the White House, urged patience.
"It's not going to happen overnight," he said. "There's still great fragility in the financial systems. But we think that we are moving in the right direction."
Still, administration officials said they are moving quickly. White House spokesman Robert Gibbs said the first purchases should happen "quite soon."
There are two parts of the government program, one to buy pools of loans, such as mortgages, and one to buy securities, financial investments that are backed by bundles of mortgages and other kinds of loans.
In the loan program, a bank will approach the FDIC and let it know it has a pool of loans to sell. The pool of loans will be auctioned by the FDIC to private bidders. Say the highest bid is $84 for every $100 in a risky mortgage. Of that, FDIC guarantees $72 in debt financing to the private investor, Treasury invests $6, and the investor kicks in $6.
The securities program will work in a similar fashion. Approved fund managers will raise private capital, which the government will match while also providing supplemental loans. The fund manager then buys the securities.
Eligible securities include mortgage-backed securities that were originally rated AAA or are currently highly rated.
Standard & Poor's said of $2.8 trillion in residential mortgage-backed securities issued in 2005 through 2007, it has downgraded about $882 billion and an additional $1.3 trillion could be downgraded. About 43% of the securities that originally carried S&P's highest AAA rating have been downgraded.
Some expressed concern that taxpayers are paying too much and investors too little. "The plan seems to offer little incentive for private investors to participate unless the subsidy is made so rich that it comes at the expense of the taxpayer," House Republican Whip Eric Cantor of Virginia said.
But Geithner said the government has to take on risk to entice investors to participate. "We have to get the incentives right so we can get private capital coming in," he said.
Fellow Democrats support the plan. "We must act," Senate Majority Leader Harry Reid of Nevada said. "One risk we will not take is standing on the sidelines and doing nothing while a bad situation gets worse."
Creating such incentives may have been made more difficult by the rush on Capitol Hill to write legislation to prevent firms receiving government aid from giving bonuses to employees. Last week, the House of Representatives passed a measure to tax such bonuses at 90%. The move came after it was revealed that insurance giant AIG, which has received pledges of about $180 billion in federal assistance, provided large bonuses to some employees in the division that produced AIG's massive losses.