WASHINGTON --- An Obama administration plan to dissolve large, struggling financial firms rather than bail them out is encountering Republican resistance, Democratic doubts and only qualified support from regulators.

At a House Financial Services hearing Thursday, lawmakers from both parties worried that the proposal would give regulators and the executive branch unprecedented power.

"I'm not a man that fears this administration or you," Rep. Paul Kanjorski, D-Pa., told Treasury Secretary Timothy Geithner. "But I do fear the accumulation of power exercised by someone in the future that can be extraordinary."

Others argue that by singling out financial firms important to the economy, the government could inevitably set itself up to bail them out, and that even dismantling rather than rescuing them would take taxpayer money.

Rep. Brad Sherman, D-Calif., called the bill "TARP on steroids," referring to the government's $700 billion Wall Street rescue fund.

"The only authority we would have would be to manage their failure," Mr. Geithner told the committee.

The debate comes as Congress works on legislation to respond to the financial crisis.

For the committee's chairman, Rep. Barney Frank, D-Mass., who wrote the proposal in close coordination with Treasury, the broad skepticism illustrates the delicate work needed to tackle such a big task.

The legislation would let federal regulators identify and monitor big financial firms and step in to wind them down before they collapse. If the government must use taxpayer money to dissolve a company, Treasury would recoup those costs by imposing a fee on firms with assets of at least $10 billion.

When to create such a fund has become a significant point of contention.

Mr. Frank and the administration recommended that any taxpayer infusion be recovered after the fact from large institutions.

But Sheila Bair, the head of the Federal Deposit Insurance Corp., which would conduct such a wind down, said the industry should pay into an insurance-like fund ahead of time.

Regulators were powerless last year when investment bank Lehman Brothers and insurance giant American International Group neared collapse. The government let Lehman Brothers fail, helping trigger the worst financial crisis in seven decades as nervous investors withdrew funds from money markets and credit lines froze.