“Trust, but verify,” Ronald Reagan remarked famously and frequently during his presidency.

Reagan repeated those words of caution often as he engaged in strenuous negotiations with the former Soviet Union, this country’s arch foe during the Cold War era.

President Reagan’s signature phrase has fresh currency in these times of economic turbulence. It can serve as a useful touchstone for wary taxpayers and their political leaders alike as huge amounts of federal dollars are handed out to resuscitate the nation’s floundering economy.

Trust, but verify. That approach seems to be particularly on the money concerning President-elect Barack Obama’s request to President George W. Bush to ask Congress to free up the remaining $350 billion in TARP funds, the money targeted for banks in the name of reviving the financial system. It sounds eminently sensible to give Obama a ready reserve to deal with unforeseen emergencies in the banking system in a timely manner. But it also seems essential to insist on closer monitoring of how those funds are used by the recipients. Some $250 billion disbursed last fall to the banks has yet to be satisfactorily accounted for. Understandably, that makes taxpayers nervous.

Trust, but verify. Obama has promised to do better in tracking the fate of taxpayer dollars, but has so far been light on specifics of how that will be achieved. That won’t do. “It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry,” says Elizabeth Warren, the top congressional watchdog overseeing the financial bailout. Banks have not been forthcoming with details on how they’ve spent federal money. Sorry, but transparency is not optional.

While pressing for quick action by Congress to put a financial tool kit at his disposal, the president-elect also has rightly emphasized the need to target the financial bailout dollars in the most effective way.

When it comes to how — and how soon — these billions are used, urgency must properly yield to firm insistence on accountability.

Trust, but verify.