'This Week' Transcript: Larry Summers & Michael Steele

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...

STEPHANOPOULOS: And, in fact...

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