Treasury Secretary Timothy Geithner: Unemployment Could Go Up Before It Comes Down

"If you extend all these tax cuts just for two years or so, you're going to leave the vast bulk of Americans…with uncertainty about what the rules of the game are going to be," Geithner said. "What we're proposing is to extend those tax cuts for the middle class. Extend those tax cuts for small businesses. Make clear that we're going to keep dividends and capital gains rates, the taxes that go to business, to capital investment, at a modest rate going forward. That'll give people more certainty."

On Sunday's "This Week with Christiane Amanpour," Speaker Nancy Pelosi called for the middle-class tax cuts to be extended prior to the November elections, but Geithner said most people do not think that will happen, leaving a narrow window to pass the legislation before all the tax cuts expire – something Geithner called a "very irresponsible act for the country."

"It is the responsibility of the Congress to make sure that does not happen," Geithner said. The best way to do that is to go ahead and move and pass the tax cuts that go to middle-class Americans and these extensions of tax cuts for businesses and for capital income. That would be a good strategy."

Geithner: 'The Business Community Always Wants Their Taxes Lower'

Before businesses begin to use the estimated $1.8 trillion they have set aside, they want a commitment that their taxes will not increase over the next two years. Geithner did not make that promise, instead saying "the business community always wants their taxes lower."

"It's understandable. And you could say that's what their job is, to argue for lower taxes. But our job is, again, to make sure we have an economy that is stronger, that a private sector that's going to grow in the future…Our responsibility is looking out for that public interest," Geithner said.

White House vs. Wall Street

Stephanopoulos asked Geithner about the "cold war" that has emerged between the White House and Wall Street. Former Federar Reserve chairman Alan Greenspan said Sunday that he has "never seen the type of animosity between government and Wall Street" before.

CLICK HERE for George's Bottom Line on his interview with Sec. Geithner.

The economic crisis left plenty of blame to go around and Geithner said Obama had a "deep obligation" to issue reform. Geithner promised quick action but offered "no apologies" for the new legislation.

"There's nobody here or across the country that would argue that our system worked, that would argue it was not broken," Geithner said. And so our job was to make sure we put reforms in place to prevent a crisis from happening. And we're going to do that quickly as we can to bring clarity to people about what the rules of the game are going to be."

Click here to return to the "Good Morning America" website.

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