Paulson: ready to use bailout tools

WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson on Friday said the $700 billion financial rescue package protects Americans' jobs and savings and that the government is ready to begin buying up soured assets from banks.

"We've been doing a lot of work, a lot of thinking getting ready for this, and once the legislation is signed, we're going to be going out and lining up some advisors from the private sector," Paulson told reporters at the Treasury.

"There are a wide variety of tools that we have that come with this legislation, and which combined with the other authorities we have ... are going to be very important in protecting the stability of the financial markets, which ultimately protect the economic security of the American people," he added.

Paulson, in a brief appearance, provided no further details but said he would say more in coming days about how the Treasury Department plans to buy illiquid assets and restore normal functioning in credit markets.

Congress on Monday initially rejected Paulson's plan to spend up to $700 billion to buy up tainted mortgage securities, but approved a modified version that expanded bank deposit insurance protections among other changes.

"This was obviously a very important vote," Paulson said. "It was a vote to protect the American people, protect their jobs, their economic well-being, it was to protect the small businesses, people's savings."

(Reporting by Mark Felsenthal, Editing by Chizu Nomiyama)