'This Week' Transcript: Larry Summers & Michael Steele

STEPHANOPOULOS: So Tuesday it is. Let me show what's been reported so far about the elements, the broad-based elements of what are in the plan that you've been working on with Secretary Geithner: a proposal to insure banks against more losses, as has already been done with Citibank; some kind of a facility to purchase the toxic assets, although that may be done through trying to encourage private investors to buy up the toxic assets; injecting more capital into the banks; increased lending by the Federal Reserve; and, of course, foreclosure relief for homeowners.

Are those the basic, broad principles inside the plan?

SUMMERS: You know, I'm not going to get into previewing Secretary Geithner's announcement, but I can tell you this: The focus is going to be on increasing the flow of credit and doing it with transparency, with accountability for those who receive support, and with a kind of consistency that, frankly, we haven't seen so far.

So, yes, there will be support for banks so that they remain stable, are in a position to lend. There will be support for the credit markets more generally. And absolutely critically, there will be support and pressure that assures that these needless foreclosures are avoided and that government is acting aggressively to contain the damage in the housing markets.

STEPHANOPOULOS: So it's probably $50 billion to $100 billion in the package to prevent these foreclosures?

SUMMERS: The president's made clear that he's very committed to foreclosures. I expect that it will be $50 billion or more that will be directed at providing support for the housing sector of our economy.

STEPHANOPOULOS: And there was a -- a report in the New York Times yesterday that this plan would not require banks to start -- to start lending or to lend more. Is that true?

SUMMERS: The program will have -- I'm not -- as I say, George, I'm not going to get into describing Secretary Geithner's program...

STEPHANOPOULOS: But that's a pretty fundamental point.

SUMMERS: But he will be -- he will be proposing a program that will make certain that we are stabilizing this system and increasing credit -- credit flows, because that's got to be -- that's got to be the objective to increased credit flows.

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.

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