I think they are having multiple goals and objectives which may conflict each other and they will have to walk the rope carefully.
Paulson is asking for the broadest tools possible. Multiple tools means definitely that the “bidding” process as you mentioned won’t be the only tool where the treasury will buy these toxic MBS. Bidding will be there to find the lower price in certain situations to “prime the pump”. But other direct tools could be applied to save the pump at the same time (ie buying at over the price).
Paulson’s submitted plan on paper mentioned nothing of “bidding” even as he testified. Rather, it requested for the broadest range of means to buy up toxic waste with 700 billions:
