The U.S. government would be given broad new powers to shrink financial firms deemed "too big to fail" and shift the cost of rescuing troubled companies from taxpayers to other large firms, according to draft legislation released Tuesday.

Telling lawmakers that the U.S. financial system has grown "too unstable and fragile," Treasury Secretary Timothy Geithner rolled out the Obama administration's plans Thursday for a massive overhaul of the government's financial oversight role.