'This Week' Transcript: Geithner

ROBERTS: ... look, it's obviously not just an economic question. It's a political question. And -- and who gets to frame it? Do the Democrats get to say the Republicans claim that they're against the deficit, but they want to keep in all these tax cuts for those really rich people, including those Wall Street bankers who got those huge bonuses, or do the Republicans say, look, here are Democrats going at you again, raising your taxes just so they can -- just so they can raise that spending, because they want the government to take over every -- every part of American life?

And I think that's a lot of what this debate will be framed around and what this election will be framed around.

TAPPER: And this debate comes as Ben Bernanke, the Fed chair, is calling the economic outlook unusually uncertain, which is chilling words for some people.

ROBERTS: Including the market. I mean, he said those words and 200 points down.

DONALDSON: The market is beginning to start to levitate again, maybe unwisely, but Europe has produced better numbers just this past week. The earnings season looks really good for some of the big companies, not just the banks, but some of the companies, Caterpillar, some of the people who make things. I think we're going to come out of it.

HAYES: But the numbers are mixed. I mean, that's the rosy scenario.

(CROSSTALK)

HAYES: The numbers are mixed, and there are plenty of numbers that are pointing in the other direction. I think if you look at the big picture, the question I think facing -- facing sort of everybody in Washington right now with respect to the tax cuts, one of the things that surprised me most about your interview with Tim Geithner was that he said raising taxes on the wealthiest Americans won't have a negative effect on growth, that was a stunning statement to me.

I think you could poll 1,000 economists and find very few of them who would agree with what Tim Geithner just said, and one of those people is Christina Romer in the White House, who has written before about the negative effects of tax cuts, and, in fact, has an article...

(CROSSTALK)

ROBERTS: Of tax increases.

HAYES: ... of tax increases, and has an article in the current American Economic Review, June 2010, in which she says tax increases have a large and substantial negative effect on consumption and growth.

ROBERTS: Now, they have to be really especially careful about the estate tax, however, because...

DONALDSON: There is none.

ROBERTS: Well, there isn't one at the moment.

TAPPER: There's not right now. And the heirs of George Steinbrenner are happy for that.

ROBERTS: Exactly. So then if they bring it back, they'd better do it overnight, you know, so that people aren't doing in their parents in anticipation.

TAPPER: Donna, you wanted to say something?

BRAZILE: Everyone is concerned about the deficit, and that's why we have to be careful how we frame this. I mean, you and I both know that -- Stephen, that over the last 10 years we've seen the top 1 percent, their incomes have grown. Meanwhile, the bottom half of the country, the bottom half of all income earners, they've seen their wages stagnate.

So I think the president needs to be wise enough to take a look at the entire array of tax cuts that he could provide to small businesses and middle-income individuals that will help spur economic growth.

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