WASHINGTON --- The Obama administration on Thursday sent its clearest signal yet that it is prepared to extend its $700 billion bailout for Wall Street for another year, even as lawmakers said they were frustrated that not enough was being done to help the average American.

"We still have work to do," said Herbert Allison Jr., the senior Treasury official in charge of the bailout fund.

Though some economic indicators suggest the nation is beginning to heal from the worst crisis in decades, experts warn that the market is fragile. Hundreds more banks are expected to fail in the next few years, largely because of souring loans for commercial real estate.

In his testimony, Mr. Allison repeatedly deferred to Treasury Secretary Timothy Geithner on whether the administration would authorize an extension of the bailout program through next year as the law allows.

At the same time, Mr. Allison said further government intervention in the market might be necessary because of the decline in commercial real estate.

"In this context, it is prudent to maintain capacity to address new developments," Mr. Allison told the Senate Banking, Housing and Urban Affairs Committee. "By bolstering confidence, having such capacity may actually reduce the need to use it."

Congress approved the rescue plan, known as the Troubled Asset Relief Program, with bipartisan support in October 2008 at the request of then-President George W. Bush during the height of the financial crisis.

The Treasury Department has the option of extending the program to October 2010 so long as it provides a justification to Congress before the end of the year.

According to the administration's latest report, the Treasury has obligated $443.8 billion from the fund to specific institutions. Banks have paid back the Treasury $70.3 billion of the assistance they received, and they have paid nearly $9.4 billion in dividends and interest payments.

TARP, as the program is commonly known, is credited in part with pulling back the financial sector from near collapse last year.

But its infusions of money into huge banks, the giant insurer AIG and the auto industry have been unpopular with the public and in Congress, where lawmakers are under pressure to save jobs and stop foreclosures.

"We can get billions out. We can buy General Motors overnight, but we can't help a homeowner," said Sen. Mike Johanns, a Nebraska Republican.