'This Week' Transcript: Timothy Geithner Full Interview

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So these taxings are very modest. They -- they ask for modest additional sacrifice and responsibility by the Americans in the most fortunate -- the most -- you know, in the best position to do that.

And remember, the effective tax rates on the richest Americans today are at the lowest point they've been in a very long period of time. And I think there's no credible argument that asking them to pay a modestly higher share of their income in taxes would be damaging to economic growth, particularly relative to the alternatives.

Again, if you don't do this, whose taxes do you want to raise or whose benefits do you want to cut?

Those -- those other types of alternative proposals would be much more damaging to growth.

STEPHANOPOULOS: At the end of the year, if Congress doesn't take action -- and I know you've been pushing for Congressional action -- everyone's taxes are going to go up. One of the mat -- most massive tax increases in American history. Some people are already calling it Taxmageddon. We're going to see the Bush tax cuts expire. That's going to be an increase in income and investment taxes. We're going to see the marriage penalty returning, the child tax credit decreasing, the alternative minimum tax patch expires. Payroll tax increases go up for everyone.

How worried are you that Congress and the president will not be able to come together to solve this problem before December 31st?

GEITHNER: You know, there's no reason that has to happen. And, of course, we'd sign, today, an extension of the middle class tax cuts that go to 98 percent of Americans just to protect for them today, protect them against any risk that -- that the politicians in Washington can't -- can't come together on this by the end of the year. And they have a very strong incentive to come together, as you say...

STEPHANOPOULOS: But that's not going to happen during...

GEITHNER: -- you know, this is a...

STEPHANOPOULOS: -- an election year, is it?

GEITHNER: Well, you mean you -- not pass the middle class tax cuts?

Of course you could do that in an election year. They'd just have to be willing to do that. But they have a -- a very strong incentive to come together in the lame duck session after the election, before the end of the year, and put in place a balanced package of fiscal reforms over the long run, to prevent that kind of damage to the economy.

And that's a perfectly achievable thing to do, again, because what we're debating on the tax side is a really simple, limited proposition. It's whether the 2 percent of the most fortunate Americans should be asked to pay a modestly higher share of income in taxes, a part of a balanced program of savings that are going to be very hard -- hard for people to adjust to over time. And we think that's a reasonable strategy.

STEPHANOPOULOS: Do you expect the president and you will be proposing an entire balanced program before the election?

GEITHNER: No, we've already laid out a comprehensive set of spending, savings and revenue proposals. And what we're trying to do is to try to make the case for those to the American people, because, again, to do this right, in a way that's fair and good for the economy, you've got to do it in a way that's balanced and preserves room for investments, again, things like education and infrastructure, things that will make us grow more fast -- more rapidly in the future.

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