'This Week' Transcript: Treasury Secretary Timothy Geithner

GEITHNER: We have a very good plan, a very good mix of tax reforms that raise a modest amount of revenue on the wealthiest 2 percent of Americans, combined with very comprehensive, very well designed, very detailed savings that get us back to the point where our debt is stable and sustainable. And we -- if we can do that carefully, we can create some room to invest in things that make America stronger, like rebuilding America's infrastructure, helping Americans refinance their mortgages, some careful tax incentives for business investments. We think those are good investments in America, and we think we can afford them. And we should do that as part of a deal like this. That's what we think makes sense.

STEPHANOPOULOS: Let's look at an outline of what the Republicans said they heard in the meeting, your offer. $1.6 trillion in tax increases over the next ten years. $50 billion in stimulus spending right now. $400 billion in unspecified Medicare cuts over the next 10 years, and then permanent authority to increase the debt limit. The president wants that authority. They look at that $1.6 trillion in revenue and say it's twice as much as you get from raising taxes on the wealthy, again, and much more than Democrats would ever accept in the Senate. That's why they say this is not serious.

GEITHNER: Let me tell you what we propose what we think makes sense, and let me start with part of what you said, which is how to make sure we're lifting the threat of default over the American economy, over the credit (ph) of the United States, over the savings of Americans. What we propose is to take an idea that Senator McConnell proposed last in December of 2011 and just extend that. And what that does is, again, lift the cloud of default over the economy, because the president has to (inaudible) propose an increase in the debt limit, and Congress then has a chance to express his view to disapprove that. And it was a very smart way by a senator with impeccable Republican credentials, to, again, lift this threat, this periodic threat of default from the American economy, and that's what--


STEPHANOPOULOS: He said he never intended it to be permanent.

GEITHNER: But, again, it was a good idea then, it's a good idea going forward. And again, it came from him. It wasn't our idea. It makes a lot of sense.

Now, what you said there was not quite right is, what we laid out for them is a detailed, comprehensive set of $600 billion of reforms in health programs, other government programs over ten years, which are going to be tough, but that we think that make sense.

They don't like all of those changes. They might want to go beyond that, might want to do some different things, but they have to tell us what those things are.

Now, you're right on the revenue side. We're proposing to let rates go back up to the Clinton levels on 2 percent of Americans. Again, now is a very good time for the American economy. We can -- that would be a good thing to do, sensible economic policy, and we want to combine that with tax reforms that will limit deductions for the top 2 percent of Americans. There's no surprise in this. We have been proposing this for a very long time. The president campaigned on it, and I think that's where we're going to end up. And I think there's going to be very broad support from the business community and from the American people for an agreement with roughly that shape.

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