It began as a taxpayer-financed fund to buy so-called toxic assets, shifted to one that injects capital into distressed banks, and is now veering toward propping up ailing U.S. automakers.

The $700 billion bailout fund administered by the Treasury Department has changed direction roughly in tandem with the economy’s deepening woes.

When it was first conceived, Treasury Secretary Henry Paulson said the fund would be used to buy unwanted or failing assets from financial institutions in a bid to clear the way for lenders to make more loans and loosen a credit crunch.

The sheer mechanics of setting up an operation inside Treasury to evaluate questionable assets that lenders might want to sell guaranteed a slow process, so by mid-November that tack had changed to stress putting capital into banks to ensure they had funds that, hopefully, they would lend.

While he, Paulson,  warned of the economic harm that could come if a major automaker failed, he argued the Treasury-run program was meant only to stabilize the financial sector.

But that apparently changed when the Senate balked at a bailout on Thursday night and the White House said funds from the financial bailout program might have to be used — another change in direction.

Out of the initial $350 billion Treasury has drawn down, only $15 billion is still uncommitted, although Paulson could redirect billions more he had pledged to pump into banks.

Looks like Paulson is not too thrilled with the prospect of helping workers, but he may have no choice in the end.