'This Week' Transcript: Larry Summers & Michael Steele

STEPHANOPOULOS: But you will not be asking for more money in this package?

SUMMERS: In this package, we are going to use -- you know, it's pretty rare for -- I'm not sure there's any precedent for a president being successful in passing legislation even before he's elected. And so it was a very significant step when the authorization to use the remainder of the $700 billion TARP funds was given to the president even before he was elected.

And, frankly, after all the problems that program has, the priority now has to be restoring trust, demonstrating that the financial system can be supported in ways that are accountable and transparent, and make a difference.

STEPHANOPOULOS: But Senator...

SUMMERS: And that's what -- that's where the president's focus is going to be.

STEPHANOPOULOS: But Senator Conrad and many private economists have said that you're going to need to be asking for $300 billion to $500 billion more for the financial institutions down the road. Is that a reasonable estimate?

SUMMERS: Right now, the focus is on beginning a process of repair.

SUMMERS: What was done averted what could have been a profound collapse, but the credit markets in the country aren't working right. And that's an important part of the reason why the economy's not working right.

STEPHANOPOULOS: But more money going to be needed down the road?

SUMMERS: And right now, we've got to put more money -- right now, we've got to put more money in to make that system more effective and to do it with transparency and accountability.

We'll do what's -- we'll do what's necessary. That's something the president has been very clear on. He wants us -- he believes the government needs to be leaning forward, that we need to make sure that we are ahead of these problems. And he'll be recommending whatever necessary -- whatever measures are necessary to achieve that objective.

STEPHANOPOULOS: So no new money now, but maybe down the road?

SUMMERS: We'll see what happens, George.

STEPHANOPOULOS: Mr. Summers, thanks very much for your time today.

SUMMERS: Thank you.

STEPHANOPOULOS: And now for the Republican perspective, the chairman, the new chairman of the Republican National Committee, Michael Steele.

Welcome to "This Week" and your first appearance as chairman.

STEELE: Good to be here. Yes, it is. It's great to be with you.

STEPHANOPOULOS: Well, you heard Larry Summers right there on the stimulus package. He says that after eight years, after the last eight years, your party has no credibility on the economy.

STEELE: Well, I think that's laughable. I mean, he acts like we have spent the last eight years in -- in this -- in the mess that we're currently in. This is about 18 months old.

The reality of it is, Bush inherited a recession. He got us through that recession. The spending was out of whack. There's no doubt about that. And a lot of Republicans had a problem with the level of spending that took place during that time.

But the economy did grow. Close to 6 million jobs were created. Now we're on the downside of that and -- in that cycle. And the question now becomes, how do we as a country shore up this economy?

And I had -- didn't hear anything from Mr. Summers that assured me or reassured me that this administration gets it when it comes to how you create wealth in this nation. It is not by spending dollars on programs that you can put in a separate bill and deal with later on, instead of focusing on, you know, tax credits and -- and relief for small-business owners, incentives for people to get back into the credit markets, to deal with the mark-to-market rules that have stymied the banks and -- and deal with the housing crisis.

STEPHANOPOULOS: But outside of Washington, some strong Republican voices have said the stimulus package is needed now. Governor Arnold Schwarzenegger, Governor Charlie Crist of Florida, he supports the package.

(BEGIN VIDEO CLIP)

GOV. CHARLIE CRIST, R-FLA.: This program will help us with education, with health care, Medicaid specifically, infrastructure. These are the kinds of things that produce jobs. It could mean $13 billion to the sunshine state. It comes at a time when we need it. People need jobs. It's about jobs, jobs, jobs.

(END VIDEO CLIP)

STEPHANOPOULOS: He suggests that you and Republican Party leaders here in Washington are on the wrong side of the biggest issue, jobs.

STEELE: Well, no -- you know, with all due respect to the governor, I understand where he's coming from. Having been a state official, I know what it means to get those dollars when you're in tight times.

But you've got to look at the entire package. You've got to look at what's going to create sustainable jobs.

What this administration is talking about is making work. It is creating work.

STEPHANOPOULOS: But that's a job.

STEELE: No, it's not a job. A job is something that -- that a business owner creates. It's going to be long term. What he's creating...

STEPHANOPOULOS: So a job doesn't count if it's a government job?

(CROSSTALK)

STEELE: Hold on. No, let me -- let me -- let me finish. That is a contract. It ends at a certain point, George. You know that. These road projects that we're talking about have an end point.

As a small-business owner, I'm looking to grow my business, expand my business. I want to reach further. I want to be international. I want to be national. It's a whole different perspective on how you create a job versus how you create work. And I'm -- either way, the bottom line is...

STEPHANOPOULOS: I guess I don't really understand that distinction.

STEELE: Well, the difference -- the distinction is this. If a government -- if you've got a government contract that is a fixed period of time, it goes away. The work may go away. That's -- there's no guarantee that that -- that there's going to be more work when you're done in that job.

STEPHANOPOULOS: Yes, but we've seen millions and millions of jobs going away in the private sector just in the last year.

STEELE: But they come -- yes, they -- and they come back, though, George. That's the point. When they go -- they've gone away before, and they come back. And the point is that the small-business owners take the risks. They're the ones that are out there in the morning putting that second mortgage on the house, taking the risks that are necessary so that they can employ your -- your kids and my kids and future generations. That's sustainable, long-term growth.

Otherwise, then why do we need the small-business community? Why don't we all just get a government job and call it a day?

STEPHANOPOULOS: So your plan would simply be more incentive to small businesses?

STEELE: Pardon me?

STEPHANOPOULOS: Your plan would simply be more incentives to small businesses?

STEELE: More incentives -- more incentives to small businesses, at the same time correcting those rules in the markets that have hindered and frustrated the banking process, that have lent itself to drying up the credit markets as we see them, dealing with the Fannie and Freddie crisis more respectfully and more proactively, instead of sitting back and figuring out, "Oh, well, let them take care of it." That's how we got into this mess from the beginning.

Remember, in 2003, George Bush sent a bill to the Congress asking them to deal with the Freddie-Fannie crisis at that time. And the committee said no.

So the reality of it is, all of this stuff that we are now dealing with could have been dealt with along the way.

STEELE: And I don't think -- and I think a large, significant number of Republicans and -- and Americans out there who aren't Republican -- believe that the best way to handle this is not throwing more money at it, but rather dealing with the crisis at hand...