President-elect Barack Obama's nominees to the Federal Reserve Board and the Council of Economic Advisors told a Senate banking panel Thursday that the $700 billion bailout package is vital to stabilizing the financial markets.

In a confirmation hearing before the Senate Banking Committee, Daniel Tarullo, the nominee for the Fed, said he thinks the U.S. would be in a much worse position if the Troubled Asset Relief Program had not been implemented.

"I don't think we can deny that the situation in the fall was a very grave one indeed," Tarullo said.

Similarly, the nominees to the Council of Economic Advisors said they feel the money is essential because of the problems in the credit markets. Those nominees are Christina Romer, Austan Goolsbee and Cecilia Rouse.

Despite their support for using taxpayer money to stabilize the markets, they also feel the government needs to do a better job of tracking how the money is being used.

They also added that some of the money needs to go toward stemming the crisis in mortgage foreclosures. They also spoke before the Senate Banking Committee at their confirmation hearing.

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com

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