'This Week' Transcript: Treasury Secretary Timothy Geithner

COLE: You know, I think not actually not, actually, but I think you have to remember our fingerprints aren't on this if we cooperate with the president and make 80 percent of the Bush tax cuts permanent for 98 percent of the American people. That's a victory not a loss. And then we're still free to try and fight the fight over higher rates, offering revenue, which the speaker has put on the table.

Politically to me, that seems to be a much superior position than a messy deal at the end where it looks like we caved. I think we have the opportunity to take the initiative and actually, again, move the discussion on entitlements.

STEPHANOPOULOS: And what you also avoid there, Dan, something else that I think some Republicans are worried about, not '92, but 1994 when the government shut down, Newt Gingrich was blamed.

SENOR: Right. Oh that's -- trust me, you talk to Republicans that is what their -- they said no matter how this shakes out, if we go over the fiscal cliff, we are blamed. I hear that over and over.

I will say, look, there's something to what Tom is saying, which is it is an amazing notion to think that a -- a just elected Democratic president is necessary in order to make permanent the vast majority of Bush's tax cuts. Those were tax rate cuts -- you know when those tax cuts were demonized by the Democrats, they weren't just the tax rate cuts on the upper income, they were tax rate cuts across the board. The idea that most of them could be made permanent -- I mean, Bush couldn't have gotten that done in 2004 after being reelected. So I do think Republicans should take a victory lap in that regard, even if I'm skeptical of raising the top rates.

ROBERTS: It is really politically smart to do this. You know, but it's also politically smart to cut the knees out from underneath Grover Norquist. I mean, this guy -- I mean, who is he? He's an unelected...

SENOR: But it's not him. It's all the members of congress he's telling to play. He's become a straw man. He represents something that's real. He represents something that's real.

ROBERTS: The emperor has no clothes and to say that is I think very...

RATTNER: His arm is melting away, because I think everybody recognizes to get these numbers to work you have to have revenue increases. And the question then is do you next tax rate increases or not? I think it is very tough to make the math work...

(CROSSTALK)

COLE: ...honestly, I think -- and I like Grover, I don't have any problem with having signed your pledge, but there is a big -- I'll be back -- there's a big, big difference between not being able to extend our temporary tax cuts. That to me is not a violation of the pledge. I didn't sign a pledge that said I have to extend every temporary tax cut. If that was true, I'd have to be for also extending the payroll tax cut. And I think...

STEPHANOPOULOS: Are you not for that?

COLE: No, I'm not -- well, look if you can find a way, great. But I don't like cutting payroll taxes because the cut is always temporary. It doesn't change. And you have to fund Social Security, you have to fund Medicare. So, no, I think those are...

ELLISON: But I don't like any of this pledge stuff. What about the pledge to the American people to do fiscally responsibly for everybody. I mean, I actually think that it's great that you made that proposal. And I think that you might find...

COLE: Find somebody else who likes it...

(LAUGHTER)

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