New York Federal Reserve President Timothy F. Geithner, widely reported to be President-elect Barack Obama ’s choice for Treasury Secretary, could face tough questions in confirmation hearings about his role in devising a financial rescue plan that has become increasingly unpopular with lawmakers.

Geithner would be taking the reins at Treasury during an unprecedented economic crisis that has battered the U.S. economy and shaken investor confidence across the globe. More immediately, Geithner would also serve as the steward of the recently-enacted $700 billion bailout law (PL 110-343), with nearly unfettered authority to spend those bailout funds in the hopes of shoring up economic stability.

“The Treasury Secretary has enormous powers in ordinary times and even greater powers in these troubled times, so the Finance Committee owes the American people all due care and diligence in considering this nomination,” Sen. Charles E. Grassley of Iowa, the panel’s ranking Republican, said in a statement.

While his confirmation by the Senate appears likely, Geithner’s role in the creation of the bailout program is likely to produce tougher-than-usual questions during his confirmation hearings before the Senate Finance Committee, particularly from Republicans. As head of the New York Fed, he played a key role in constructing the bailout, a program that remains unpopular with many lawmakers.

Those questions are likely to be even sharper after the current Treasury secretary, Henry M. Paulson Jr. , shifted the program’s focus from buying distressed assets to making direct capital infusions to financial institutions. Lawmakers will push Geithner, a former Treasury official in the Clinton administration, for specifics on how the remainder of the bailout money — about $400 billion — will be spent.

Some lawmakers may urge Geithner to put new restrictions on any bailout funds he gives to banks, including barring dividends for participating institutions or including lending requirements. Lawmakers have been angered by reports that banks that received capital infusions have hoarded the cash rather than lending it out.

While answering questions about the Treasury’s immediate approach to the crisis, Geithner will also have to present a coherent long-term plan for how to stabilize the credit markets and get the economy back on track.

Presuming he can satisfy senators’ concerns, Geithner is likely to be confirmed. He is well-respected in Washington and in New York, where he serves as the Federal Reserve’s principal interlocutor between the central bank and the nation’s most powerful financial institutions.

Besides Grassley, other senators likely to be key players in the confirmation process — Finance Chairman Max Baucus , D-Mont., and Banking Chairman Christopher J. Dodd , D-Conn. — declined to comment on the reports late Friday.

House Financial Services Chairman Barney Frank , D-Mass., offered a strong endorsement on Friday evening, saying Geithner was an “excellent” choice.

“We’ve worked very closely with him,” during the recent financial crisis, Frank said, noting that he also dealt with Geithner while the presumed nominee was in the Clinton administration.

Industry groups also welcomed the likelihood of Geithner’s nomination.

Scott Talbott, the senior vice president for government affairs at the Financial Services Roundtable, said his organization strongly supports Geithner. In the Senate confirmation debate, Talbott said, “the natural question’s going to be what do you do next with the current situation, and how will you change the system — how will you update it.”