Transcript: Diane Sawyer Interviews Treasury Secretary Timothy Geithner

I mean, look what happened to the country last year. You had -- you saw, again, economic activity stop. You saw people's pension values fall by 30 to 40 percent. You saw deep fear and uncertainty. Unemployment rose dramatically. A huge amount of damage to the economy because this government didn't do enough soon enough to try to bring the crisis -- to an end. Try to end the panic. But -- and things are better today because of that. But you are exactly right. And I think people in America are right. That when we have the economy growing again. We're going to have to bring these deficits down.

SAWYER:
Back to that a second. A couple of specifics. TARP expires at the end of the year. Extending it?

GEITHNER:
We're -- haven't made that judgment yet. But I think people need to understand, we're going to do what it takes to make sure we repair this damaged system. And we get growth back in track. But we haven't made that judgment yet.

SAWYER:
And tax credits for first time home buyers? Extending?

GEITHNER:
The -- the range of things in the recovery act that were very important, very helpful in bringing growth back. And we'll take a careful look at which of those deserve some temporary extension.

SAWYER:
Again, one of the things people say looking forward is they understand the intention is to get out of this.

GEITHNER:
Right.

SAWYER:
They don't see a possible way out without tax raises.

GEITHNER:
But -- but look what we've already done. It's just an important sign of credibility and people should take some confidence from that. Even though we only started growing as an economy this quarter, again, we're already winding down, dialing back, pulling back from the things we did in the emergency. So, you need to take -- people should take that as a sign of the commitment of this president, and this Federal Reserve, again, to walk back the emergency stuff as the emergency fades. Then we start to focus on repair.

Now, on the -- on the -- on the budget deficits, I think Americans understand that we have an unsustainable -- fiscal position. That we're going to have to bring those deficits down over time. And the president's committed to doing that. I think the American people understand that's necessary. And that's going to be important to do, because if we don't do that, make people confident in that, then growth won't be as strong as we need it to be. And you'll see investment crowded out. And that's why it's so important to do.

SAWYER:
I know that you have said that we're not at the point where we need to make judgments about what specific tax measures we would need to take. Are -- are you still guaranteeing that no one in America will have their taxes raised unless they make more than $250,000 a year?

GEITHNER:
The president committed to that in the campaign. He feels very, very strongly about that. And we can get out fiscal house in order. We can go back as a country to the point where we're living within our means without violating that basic commitment.

SAWYER:
That's your promise. It will not happen.

GEITHNER:
That's his commitment. And he's very committed to that. And if you look at what we've done, again, he put in place as part of the recovery plan a tax cut that went to 95 percent of working Americans. And those basic values, that basic commitment to the middle class of America is going to shape the strategy -- he brings to the economy.

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