FAR TOO TIMID in its response to the Arab Spring, the Obama administration lately has shown welcome signs of greater assertiveness. This week the president and secretary of state finally declared Syria’s Bashar al-Assad an illegitimate ruler after the U.S. ambassador in Damascus made a high-profile visit to the besieged city of Hama. White House counterterrorism chief John Brennan traveled to Saudi Arabia last weekend to tell Yemeni President Ali Abdullah Saleh that U.S. aid depends on his agreement to step down.

Now the administration is reportedly debating its policy for Libya as a meeting of an international contact group on that crisis nears. Four months after intervening on the side of anti-government rebels, Western governments are expressing optimism that the regime of Moammar Gaddafi may be close to crumbling. But the dictator has not yet surrendered; the military situation in most of the country remains stalemated. Moreover, the rebel government and army face their own critical problems — beginning with a lack of money to pay salaries and keep essential services running in the cities they control.

At the last meeting of the Libya Contact Group, Secretary of State Hillary Rodham Clinton promised that the United States would help put the rebel government, known as the Transitional National Council, “on firmer financial footing.” Washington is well positioned to do so, since tens of billions of dollars in Libyan assets are frozen in U.S. banks. But the administration has been unable to deliver on its pledge, because legislation it drew up to free up some of the frozen assets is bogged down in Congress — in large part because of the White House’s mishandling of congressional authorization for the Libyan intervention.

There is, fortunately, a quick and straightforward way for the administration to resolve the problem: It can recognize the Transitional National Council as Libya’s legitimate government. This could allow its leaders to gain access to the frozen funds or at least to use them as collateral for loans. U.S. recognition would break no ground. More than two dozen nations have already taken the step, including NATO allies such as Britain, France and Canada.

State Department lawyers have worried that recognizing a rebel government that does not control Libya’s capital or much of its territory could be a bad precedent, while some in Congress have worried that the council’s leaders are relatively unknown and may have ties to al-Qaeda or other extremist groups. But in the past several months, the Benghazi-based administration has shown itself to be moderate and responsible, and it has committed itself repeatedly to an agenda of democracy and personal freedoms. Access to funds will make it more stable and more prepared to take charge of the country when the Gaddafi regime finally goes.

There are other simple steps the administration can take to support a democratic transition. In a letter sent last week to Ms. Clinton advocating recognition of the rebel administration, Republican Sens. John McCain (Ariz.), Lindsey O. Graham (S.C.) and Marco Rubio (Fla.) and independent Joseph I. Lieberman (Conn.) pointed out that the U.S. diplomatic presence in Benghazi lags far behind that of France, Britain, Italy or even Turkey. They argued that “the dispatch of even a handful of additional diplomats” would “improve our understanding of developments on the ground” and help lay the groundwork for the post-Gaddafi era. This is sound advice; Ms. Clinton should act on it.