'This Week' Transcript: Larry Summers & Michael Steele

STEELE: How does -- how does -- I mean, I'm all for Pell Grants, but how does a Pell Grant, increasing funding for Pell Grant get me a job when I just lost mine?

STEPHANOPOULOS: Well...

STEELE: And that's the question Americans are asking themselves. And that's why the president is upside-down with the voters on this issue.

STEPHANOPOULOS: That is one program. Democrats would say that the broader school construction funding will create jobs. Do you accept that?

STEELE: For a short term, yes. It's a construction job. I agree with that. But, you know, do we need to put -- is that what you -- we need to put in place right now when you can look at other ways in the economy to stimulate that type of growth?

STEPHANOPOULOS: And your Republican National Committee has passed a resolution about the government bailout of the financial industry. It says, "Be it further resolved that the members of the Republican National Committee call for all Republican members of the Senate and the House of Representatives to oppose any and all further bailout legislation."

Does that mean you expect to oppose the plan that Secretary Geithner will be announcing this week and any future requests for funding?

STEELE: Let's see what -- see what the secretary's putting on the table. But if he's talking about more spending, yes, I have a problem with that, and I think a lot of people do.

Look, no one's talking about the downstream effect of all this money getting into the markets, let alone what's happening internationally with governments flooding their -- their economies with cash. There's a little thing called inflation. There's a little thing called -- you know, that form of taxation on your earnings is worse than anything else you can do.

So this is -- this is not being done in balance. This is being done out of balance, where everybody is feeling -- let's solve this problem by taking more money out of -- out of people's pockets and putting it into the system.

What I'd rather have us do is invest dollars in creating pathways, incentives for small-business owners, for the business community of this country to take the risk again in the marketplace.

STEPHANOPOULOS: You just got elected of the Republican National Committee last week...

STEELE: Yes.

STEPHANOPOULOS: ... yet you're already facing some headlines about potential financial irregularities in your past. The Washington Post yesterday...

STEELE: Yes.

STEPHANOPOULOS: ... and I want to give you a chance to respond to these allegations -- here was the Washington Post yesterday. It says that "Steele's campaign spending is questioned." It goes on to say, "Michael S. Steele, the newly elected chairman of the Republican National Committee, arranged for his 2006 Senate campaign to pay a defunct company run by his sister for services that were never performed, his finance chairman from that campaign has told federal prosecutors."

Is that true?

STEELE: No, it's not true. And -- and -- and those allegations were leveled by a convicted felon who is trying to get a reduced sentence on his -- on his conviction.

And the reality of it is that the U.S. attorney, as well as the judge, looked at what he presented and did not apply it, said there was no credibility to it. The Washington Post ought to be ashamed of itself for getting out in front of something without all the facts.

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