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During testimony on Capitol Hill today, Paulson said that's not what the money was intended for.

The treasury secretary also defended his handling of the financial bailout package. He told the House Financial Services Committee that using the money to buy stakes in financial institutions, instead of buying toxic mortgage-backed securities, will stabilize the financial system more effectively.

"As facts and conditions in the market and the economy have changed, we have adjusted our strategy to most effectively address the urgent crisis, and to preserve the flexibility of the president-elect and the new secretary of the treasury, to address future challenges in the economy and capital markets," said Paulson.

Some lawmakers, however, expressed concern that changing course sends confusing signals to Wall Street investors and taxpayers.