With Congress back in session and the anniversary of the Lehman Brothers failure upon us, the Obama administration is resuming its quest for greatly expanded authority to bail out American businesses. Under the Treasury reform blueprint, any financial company, whether a regulated bank or not, could be rescued or seized by the Federal Deposit Insurance Corp. if regulators believe it poses a systemic risk.

Before receiving authority for new adventures across U.S. commerce, financial regulators should explain their current interventions. The basic questions: How exactly does the government measure systemic risk, and how do regulators know that the U.S. economy can't live without a particular firm? Americans still don't know why Bear Stearns, Citigroup and AIG were saved but Lehman wasn't.

A recently filed federal lawsuit seeks answers. Plaintiff Vern McKinley worked at the FDIC in the 1980s and is now suing his old employer, as well as the Federal Reserve. Last December, McKinley sent a Freedom of Information Act request to the Fed to find out what Fed governors meant when they said a Bear Stearns failure would cause a "contagion." This term was used in the publicly released minutes of the Fed meeting at which the central bank discussed plans by the Federal Reserve Bank of New York to finance Bear's sale to J.P. Morgan Chase. The minutes contained only the vague warning of doom. McKinley's request sought the supporting documents for this conclusion.

He also requested minutes of the autumn FDIC board meeting at which regulators approved financing for a Citigroup takeover of Wachovia. To provide this assistance, the board had to invoke the "systemic risk" exception in the Federal Deposit Insurance Act, and therefore had to assert that such assistance was necessary for the health of the financial system. Yet days later, Wachovia cut a better deal to sell itself to Wells Fargo. So how necessary was the FDIC's offer of assistance?

After McKinley sued the agency this summer, the FDIC coughed up a previously undisclosed staff memo to the FDIC board. The agency redacted the substance. The section of the memo titled "Systemic Risk" was entirely erased.

The counterparties that benefited from the AIG bailout last year were formally disclosed in 2009 after months of public pressure. A public debate on which banks really needed a bailout via the government's AIG conduit has hardly taken place. And did all of Bear Stearns' creditors, including hedge funds, need to be made whole to ensure the survival of American capitalism?

A year after the epic meltdown, this is the debate Congress needs to undertake before legislating any new federal authority. Regulators should not receive a blank check to prevent systemic risk without even defining what that term means.

WALL STREET JOURNAL