The Democratic presidential candidate also accused President Bush of taking a "my way or the highway" attitude on the proposed bailout.
Obama added that his proposed middle-class tax cuts remain "absolutely necessary" despite the economic turbulence. He said it would put money in the pockets of working families at a time when the economy may be sliding into recession.
Obama outlined several principles that he said should be included in the $700 billion bailout to ensure that troubled financial firms and their executives don't take advantage of taxpayers.
Companies that take financial aid from the government must slash their executives' salaries, he said. Taxpayers must be treated like investors who can share in any Wall Street recovery, perhaps with an ownership stake in the companies, and a new fee on financial services should be created to repay the government aid.
"This plan cannot be a welfare program for Wall Street executives," he said at a news conference.
Decisions on how to spend that $700 billion cannot be left solely in the hands of the Treasury secretary, Obama added. An independent board should be chosen by Democrats and Republicans "to provide oversight and accountability at every step of the way."
Earlier, in an interview on "Today," Obama had said the huge expense of a Wall Street bailout might require a "phase in" of the programs he has promised, including tax cuts.
"Although we are potentially providing $700 billion in available money to the Treasury, we don't anticipate that all that money gets spent right away and we don't anticipate that all that money is lost. How we're going to structure that in budget terms still has to be decided," Obama said on NBC's "Today" show in an interview aired Tuesday.
"Does that mean I can do everything that I've called for in this campaign right away? Probably not," he said. "I think we're going to have to phase it in."
But speaking to reporters in Florida, where he will be preparing for Friday's debate, Obama said he remains committed to addressing needs in health care, education and energy. "Tax cuts would be particularly important to strengthen an economy sliding into economic recession," he said.
The Illinois senator has proposed ambitious and expensive initiatives aimed at health care, education, infrastructure, alternative energy and other concerns.
Obama also said his running mate,, should have waited before commenting on the idea of bailing out the huge insurer American International Group Inc. Biden initially rejected bailing out AIG, a position taken by Republican presidential candidate that drew Obama's criticism.
When AIG's financial meltdown first drew questions of possible government intervention, McCain said taxpayers shouldn't be "on the hook" for AIG or any other corporation. Biden also said that the government shouldn't bail out AIG. For his part, Obama at the time didn't take a position on the idea of a buyout.
"I think that in that situation, I think Joe should have waited as well," Obama said in the "Today" interview aired Tuesday. Both Obama and McCain have since said the government's plan to lend AIG $85 billion was regrettable but necessary.
McCain's campaign released an ad Tuesday criticizing Obama and his allies as being "mum" during the financial crisis "because no one knows what to do."
In another disagreement within the campaign, Biden said in an interview with CBS News anchor Katie Couric that he would not have allowed an Obama ad that mocked McCain as an out-of-touch, out-of-date computer illiterate, calling the TV spot "terrible." ()
Hours later, Biden issued a statement backing off that criticism and saying that he had seen the ad for the first time and found nothing "intentionally personal" in its criticism.
"Having now reviewed the ad, it is even more clear to me that given the disgraceful tenor of Sen. McCain's ads and their persistent falsehoods, his campaign is in no position to criticize, especially when they continue to distort Barack's votes on an issue as personal as keeping kids safe from sexual predators," Biden said.
McCain's campaign responded to Biden's initial remarks by noting his "condemnation" of the ad.
"Barack Obama has brought the sleazy gutter politics of Chicago to our national stage, exposing his call for a 'new politics' as a lie and embarrassing even his own running mate with the low road campaign he's running," campaign spokesman Brian Rogers said in a statement Monday night.
On Tuesday, Obama's campaign issued a new TV ad claiming that McCain had protected tax breaks for U.S. corporations that hide profits offshore and received $50,000 from "grateful" insurance company executives and their lobbyists.