Paulson says U.S. situation worse if no bailout

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson on Tuesday said the U.S. economic situation might be much worse than it already is if Congress had not approved a $700-billion financial bailout program.

But he urged patience in expecting quick results from the effort to recapitalize financial institutions and unfreeze credit markets that have contributed to a slowing in U.S. economic growth.

"It is naive for any of us to think that when you're dealing with a situation of this magnitude that a bill could be passed or a single action taken to make all the issues go away," Paulson told a press conference.

"Our focus is on stability and strengthening the financial system and we now have the tools and powers we need to work with others," he added.

Paulson said he will keep working closely with New York Federal Reserve Bank President Timothy Geithner, who was nominated by President-elect Barack Obama to take over Treasury and said Geithner has a thorough understanding of what needs to be done.

(Reporting by Glenn Somerville; Editing by Theodore d'Afflisio)