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The U.S. government should divest its sizable stakes in a handful of large corporations within the next two years, a key U.S. Senate Democrat on financial regulatory overhaul efforts said Wednesday.

Sen. Mark Warner, D-Va., said Obama administration officials have been "abysmally slow" in embracing plans to put an end-date or timeline on the significant government intervention in some firms over the last year.

"The U.S. government ought to get out of the private-equity business, and those places where we are in private equity, we own more than 10%, ... they ought to be managed by independent trustees," Warner said in an interview with Dow Jones Newswires.

Warner, a member of the Senate Banking Committee, has authored legislation with Sen. Bob Corker, R-Tenn., that would put government investments in firms such as American International Group Inc. (AIG) and General Motors Co. in the hands of independent trustees. Those trustees would manage the investment with the goal of selling off the stakes by 2011.

"We own big chunks of these companies and we ought to make sure we maximize value," Warner said.

Though he's a freshman, Warner has embraced an active role on financial issues and plans to step up lobbying for his divestment plan in the coming weeks. At a time when there is some public perception that the government is too intertwined in certain sectors of the economy, it would send a clear message to voters that the actions of the last year will not result in permanent government involvement.

"If we could get it to the floor it might get 100 votes. Both Democrats and Republicans, I see very few people that think long term the government ought to be in the business of running companies," he said.

Warner's legislation marks the latest attempt by U.S. lawmakers to force the administration's hand on the timing of divesting stakes in U.S. companies. The Treasury Department has repeatedly said it has no interest in running the day-to-day operations of firms, and officials have been reluctant to speak publicly about their extrication plans.

Democratic leaders have expressed a recognition of the issue, but politically are wary of tying the administration's hands with the economy still on unstable footing.

On financial regulatory reform, Warner said it remains an open question as to what mechanism the government should put in place in order to wind down a large non-bank financial institution that faces failure. Warner has pushed the Federal Deposit Insurance Corp. as the agency best suited to deal with the failure of a large bank holding company, but said a systemic risk council made up of federal regulatory agencies might be a logical choice to deal with insurance companies and other non-banks.

The key, he said, is to end the idea that firms are too big to fail.

"The goal here being to allow these companies if they fail to go out of business; for management, the equity, and the debt holders to take the hit and not the American taxpayer," Warner said.

-By Michael R. Crittenden and Corey Boles, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com.