'This Week' Transcript: Treasury Secretary Timothy Geithner

What the president is willing to do is work with Democrats and Republicans to strengthen Social Security for future generations. So Americans can approach retirement with dignity and with the confidence they can retire with a modest guaranteed benefit. But we think you have to do that in a separate process, so that our seniors aren't -- don't face the concern that we're somehow going to find savings in Social Security benefits to help reduce the other deficits.

STEPHANOPOULOS: So to be clear, that is one thing that is clearly off the table. Social Security is off the table in these negotiations.

GEITHNER: We are prepared to, in a separate process, look at how to strengthen Social Security, but not as part of a process to reduce the other deficits the country faces.

STEPHANOPOULOS: OK, so that sounds like a yes to that, that question. On the issue of taxes, is there any flexibility in the president's position? Does it have to go all the way back, the tax rates on the wealthy, all the way back to the Clinton rates? Or is there some kind of formula below the Clinton rates that is still tax rate hike that the president can accept?

GEITHNER: Again, George, we think the best way to do this, and this is what we have proposed, is have those tax rates go back to where they were at one of the best, most prosperous times in recent American economic history, and then to combine that with reforms that limit deductions for the top 2 percent of Americans. We think that's the best way to do that. I'm deeply skeptical, deeply skeptical about ways to get through this without that mix of rates and reforms.

STEPHANOPOULOS: And if Congress does not agree to have those rates go up, you're comfortable with the idea of going over that cliff on January 1st?

GEITHNER: There's a huge amount at stake in this (inaudible), and there is just no reason why 98 percent of Americans have to see their taxes go up because some members of Congress on the Republican side want to block tax rate increases for 2 percent of the wealthiest Americans.

Remember, those tax rates, those tax cuts cost $1 trillion over ten years. There's no responsible way we can govern this country at a time of enormous threat, and risk, and challenge, uncertainty, millions of Americans retiring, huge levels of poverty, inequality, huge under-investment in education and infrastructure, with those low rates in place for future generations. Those rates are going to have to go up. That's an essential part of --


STEPHANOPOULOS: But as you know, a lot of Democrats think if the Republicans do indeed dig in on those tax rates, it's far preferable to go over the cliff than to reach a different kind of deal? Do you agree?

GEITHNER: I don't think that's going to happen. It certainly doesn't need to happen, and we're going to work very hard to make sure it doesn't happen. And what we're going to try to do is, again, not just protect the vast bulk of Americans from that kind of tax increase and the other damage that would come from the fiscal cliff, but we're going to do something good for the long-term of the country.

STEPHANOPOULOS: What would happen to the economy if we do go over the cliff?

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