By Patrick Rucker and David Lawder

WASHINGTON (Reuters) - The architect of the Bush administration's effort to stabilize the troubled U.S. financial system said on Wednesday President-elect Barack Obama will make the decisions on how to spend the remaining half of a $700 billion bank bailout program.

Treasury Secretary Henry Paulson, nevertheless, urged the incoming president to continue using the Troubled Asset Relief Program, or TARP, to inject capital into distressed banks.

House of Representatives Democratic Leader Steny Hoyer told reporters he does not expect a request from the White House this week for more TARP money while Democrats draft a bill to set conditions on release of further funding.

"My expectation is no request will come down this week. I hope that's the case," Hoyer said in a briefing.

The TARP is the centerpiece of a huge government effort to moderate a fast-moving economic crisis that is darkening both the Bush administration's final days and the start of the Obama administration on January 20.

Begun in October, the program has so far committed $354 billion to bailing out troubled large banks, automakers and insurance group American International Group Inc.

Paulson, who has led the plan's implementation, said the Treasury is still working on plans for future capital investments in banks using the TARP, and on "creative ways to leverage the TARP resource for consumers outside the banking system" in his final two weeks in office.

But these would be recommendations only, he said in answering questions after a speech on mortgage finance.