'This Week' Transcript: Treasury Secretary Timothy Geithner

GEITHNER: Well, let me just -- let me just correct that. The president proposed this as part of a very comprehensive, detailed, long-term fiscal program that would bring our deficits down to a sustainable level. And as part of that, he's proposed a modest increase in the effective tax rates paid by the richest Americans.

This is one way to do that, important to do. And we're proposing to do it as part of a balanced package of fiscal reforms. But he never claimed and we never claimed that this measure alone would get us the trillions in savings we need to bring those deficits down.

STEPHANOPOULOS: Well, he seemed to at one fundraiser back in September, but I take your point. You're saying he's making the -- that it's just one part of his overall...

GEITHNER: Yeah.

STEPHANOPOULOS: ... economic plan. Are you worried at all, though, that it might harm growth, these taxes, when the economy is still weak?

GEITHNER: No risk of that. Again, we're proposing a balanced set of fiscal reforms that make room for investments that will be good for job creation and the economy, in education, in infrastructure, in investment. Those things are necessary to make sure that we're making this economy stronger in the near term and in the long run.

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Now, as part of that, we don't see a feasible way -- a feasible economic strategy, a feasible political strategy, for bringing down those long-term deficits, except by asking the most fortunate Americans to -- to pay a somewhat larger share of their income in taxes. And what this Buffett rule does is makes sure that happens by limiting the ability of millionaires to take advantage of deductions and loopholes in the tax codes.

It's a simple, fair thing. It's good economic policy. It's good tax policy. And it should be part of a broad program to restore fiscal stability (ph).

STEPHANOPOULOS: But your main argument for this is that it's part of shared sacrifice, everyone has to contribute to deficit reduction.

GEITHNER: Exactly. And if you look at the -- a big part of the burden for a sensible long-term fiscal plan is going to fall on middle-class Americans. You know, again, we're proposing an approach where there's $2.50 of spending cuts for every $1.00 in revenue raises. A lot of the burden of those spending cuts is going to be shared broadly across the American people.

So these taxes (ph) 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 most massive tax increases in American history. Some people are already calling it Taxmageddon.