Secretary of the Treasury Henry Paulson, center, Speaker of the House Nancy Pelosi, D-Calif., left, and Senate Majority Leader Harry Reid, D-Nev., right, announce a tentative deal on legislation regarding the financial crisis Sunday on Capitol Hill in Washington.

Washington ? Sold to American taxpayers for up to $700 billion: an unprecedented plan to buy distressed banks’ least desirable mortgage assets.

What started as a fairly simple three-page proposal giving the Treasury Secretary unchecked power to orchestrate a bailout of the country’s financial system ended up as a complex rescue package, with enhanced congressional oversight, some added protections for taxpayers and a slap on the wrist to highly paid, underperforming executives.

The ultimate goal of the plan remains the same: buy bad mortgage-related bets from weakened financial companies so they can raise fresh capital and resume normal lending operations to businesses, municipalities and consumers.

Under the Emergency Economic Stabilization Act of 2008, which is expected to come to a vote in the House today, the Treasury Department gets $250 billion immediately to start buying up banks’ and other financial institutions’ least valuable mortgages and complex financial instruments backed by those mortgages.

If needed, an additional $100 billion is available at the discretion of the president, and a final $350 billion is on the table, unless Congress resolves to take it back. The president has the authority to veto such a resolution.

The measure also proposes limited caps on the pay and benefit packages of companies who receive the government rescue, strengthens government oversight of the program and adds an insurance program for financial companies’ bad assets.

While Democratic negotiators made significant changes to the plan Paulson sent Congress a week ago, they did not get everything they had sought, particularly more help for troubled homeowners.

House Republicans, meanwhile, fought hard for – and won – a provision that would establish a program whereby banks could buy government insurance to back the principal and interest on certain troubled assets, rather than selling them outright. They argued this was a better deal for taxpayers, and would reduce the overall cost of the rescue package.

Treasury Secretary Henry Paulson told negotiators that he believed the insurance plan would have only limited benefits.

Responding to the outcry of constituents, Congress structured the bailout in a way that sets limits on executive compensation at companies whose bad debt is purchased by the government. Lawmakers also established various oversight boards including one with members appointed by Congress and another whose members will include the Treasury secretary and the chairman of the Federal Reserve.

Despite all the oversight and restrictions Congress added to Paulson’s original proposal, the Treasury secretary will still have wide latitude in deciding such things as how to value the toxic assets and what experts to hire to run the program.

Paulson, who lost in an effort to have his decisions exempted from congressional review, has indicated that he expects to use a type of “reverse” auction in which the companies with the winning bids will be the ones willing to take less, say 50 cents on the dollar rather than 60 cents on the dollar, for the assets.

Private analysts said they believe the plan will give critical support to the financial system, helping to establish a vibrant market for hundreds of billions of dollars in mortgage assets that at the moment can’t be priced because no one wants to purchase them.

Brian Bethune, chief U.S. financial economist for Global Insight, a Lexington, Mass., economic consulting firm, said Sunday that he believed the bailout plan “will provide some critical life support for the U.S. financial system.”