U.S. officials announced Tuesday morning a broad range of measures designed to shore up the struggling financial system, including the purchase of stakes in some of the country’s largest banks and guarantees for most new debt issued by insured banks.

President George W. Bush made a general announcement just after 8 a.m. Eastern time about the developments, and Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and Federal Deposit Insurance Corp. Chairman Sheila Bair held a joint news conference later that hour to elaborate on the planned steps.

"Clearly the time had come for a more comprehensive and broad-based solution," Bernanke said at the news conference. "Waiting too long to act has usually led to much greater direct costs of the intervention itself and, more importantly, magnified the painful effects of financial turmoil on households and businesses."

The Treasury plans to invest $125 billion into the country’s largest banks, and is reserving another $125 billion for other banks, people familiar with the matter told FOX Business.

The investment rundown for the largest banks is as follows, those people said: Citigroup (C) and JPMorgan Chase (JPM) each get $25 billion; Bank of America (BAC) and Wells Fargo (WFC), $20 billion each, with Bank of America getting an additional $5 billion for its purchase of Merrill Lynch (MER) and Wells Fargo getting an additional $5 billion for its acquisition of Wachovia (WB); Goldman Sachs (GS) and Morgan Stanley (MS) will receive $10 billion each; and Bank of New York (BK) and State Street (STT) each receiving $2 to $3 billion.

The government took stakes in all of the above banks categorically in the hopes of removing the stigma of that equity investment.

The other $125 billion could be invested in potentially thousands of smaller banks. 

Treasury said that the program "will be available to qualifying U.S. controlled banks, savings associations, and certain bank and savings and loan holding companies engaged only in financial activities" that choose to participate before 5 p.m Eastern time on Nov. 14.

In addition, Treasury will be starting a separate program for banks in the worst shape, and will invest in those on a case-by-case basis.

"Government owning a stake in any private U.S. company is objectionable to most Americans -- me included," Treasury Secretary Henry Paulson said at a news conference. "Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable. When financing isn’t available, consumers and businesses shrink their spending, which leads to businesses cutting jobs and even closing up shop."

Also, the deposit insurance cap will be removed for some types of bank accounts, such as noninterest-bearing ones, that are used primarily by small businesses. That’s on top of the deposit-limit increase that was already implemented, in which it rose to $250,000 from $100,000.

The FDIC will temporarily guarantee most new debt issued by insured banks. That's meant to revive confidence banks have in each other. Particularly since the bankruptcy filing of Lehman Brothers, which left lots of institutions on the hook with debt, banks have been reluctant to lend to each other. That has been one of the most disturbing aspects of the financial crisis in the minds of U.S. officials.

In addition, starting Oct. 27, the Commercial Paper Funding Facility will fund purchases of commercial paper of three-month maturity from high-quality issuers.

The Treasury Department, FDIC and Fed cooperated to create the plan, and it was discussed with top executives of the big banks in a meeting on Monday afternoon in Washington. 

The Wall Street Journal reported that some of the big banks were unhappy with the prospect of the government taking a stake in them, but that they acquiesced under pressure from Treasury Secretary Paulson in the meeting. Those misgivings may have had at least some grounds: White House spokesman Tony Fratto later Tuesday said that banks receiving funding may have to renegotiate contracts with their top executives in order to meet Treasury's compensation guidelines.

Under the bailout bill passed by Congress, compensation limits, including curbs on "golden parachutes," will generally apply to the five highest-paid executives of any company that receives assistance from the Treasury as part of the rescue package. 

Taking equity stakes in banks shifts the U.S. plan away from its original form in the $700 billion economic-rescue package passed by Congress and signed into law by President George W. Bush. That plan would have seen Treasury purchase bad assets from banks in order to shore up their balance sheets.

This new strategy aligns the U.S. closer with its European counterparts, such as the U.K., Germany and France, which already announced plans to buy equity in their own troubled financial institutions.