WASHINGTON — The Treasury Department plans to announce details within the next two weeks on the creation of a public-private partnership for purchases of toxic assets, Treasury Secretary Timothy Geithner said Wednesday.

During testimony to the Senate Finance Committee, Geithner also dropped new details on the plan, saying it would involve funding from the Federal Reserve Board and the Federal Deposit Insurance Corp. as well as private capital.

"We are going to lay out within the next couple weeks details of a new program that would marry government financing, in this case from the mix of the Fed and the FDIC, alongside some capital from the government and some private capital to help provide financing to help unfreeze those markets for legacy assets," he said.

It was unclear exactly what role the Fed and the FDIC would play in the new program. In the case of the FDIC, providing financing for the public-private partnership raises questions about where the agency is getting its funding. The Deposit Insurance Fund is at a 16-year low, and agency officials have instituted a massive 20-basis-point premium charge to rebuild it quickly.

Geithner did not expand on those remarks, but he said the new plan would help the government avoid overpaying for toxic assets and would put private capital in place to absorb losses on them.

"By using private capital along with public capital, you can reduce the risk that the government ends up dramatically overpaying for those assets, taking risks that we cannot understand and manage, doing so at greater cost to the taxpayer," he said.

Though Geithner did not provide many new details, his comments appeared to indicate the plan was fully formed, raising questions about why more has not been revealed to date.

"Our program has these three critical elements, again: A program of capital as a bridge to private capital; very direct support to get these credit markets opening up again; and a carefully designed program of government financing alongside private capital to help unfreeze these markets for legacy assets," Geithner said.

Discussing the use of government financing to jump-start the markets, the secretary said that the financing offered would be structured so as to specifically grow less appealing to investors as markets stabilized. He said demand for government funds would fade as time passed, and private borrowing and lending would become more appealing.

"The government financing, we'll provide it on sensible terms," he said. "Terms so that as markets stabilize and conditions normalize, demand for that financing will normally fade away."

He did not specify how the financing vehicles would be structured to create that effect.

Geithner made his statements while testifying before a Finance Committee hearing on the budget, during which committee members grilled him on tax questions, the government's new loan modification program and plans to lift the economy out of recession.

Several members told Geithner that the absence of details on how the past bank rescue programs were working, as well as how the government intended to implement future rescue plans, was hurting confidence.

"That is the question of the day: confidence in the plan," said Sen. Maria Cantwell, D-Wash., during a line of questioning about the bailout of American International Group Inc. She said the public not only did not understand the AIG rescue; it did not understand the broader rescue plan.

"The plan is slowly dripping out," she said. "And they don't understand where it's going … they don't understand the plan overall."

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