'This Week' Transcript: Timothy Geithner

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GEITHNER: Well, you know, they have said in public, too, that they recognize that America has to meet its obligations.

Again, you know, this is just about the basic trust and confidence in the United States. It's about the basic recognition that we made commitments, we have to meet our commitments. There's no alternative, and they recognize that.

AMANPOUR: What if it wasn't raised? What is the doomsday scenario?

GEITHNER: I'll be very direct about it, and people understand this. Again, anybody running a business or -- understands this. What will happen is that we'd have to stop making payments to our seniors -- Medicare, Medicaid, Social Security. We'd have to stop paying veterans' benefits. We'd have to stop paying all the other payments on all the other things the government does. And then we would risk default on our interest payments. If we did that, we'd tip the U.S. economy and the world economy back into recession, depression. I think it would make the last crisis look like a tame, modest crisis. It would be much more dramatic. The cost of borrowing would go up for everybody, and it would have a permanent devastating damage on our credit rating as a country. And that's why there is no responsible person that would take any risk that we allow the world to start to fear that the U.S. would court that -- that tragedy.

Again, if you take it too close to the edge, then people will start to wonder, really, what are we doing, what are we thinking.

AMANPOUR: You seem to be confident. You're saying that they will vote to raise the debt ceiling. On the other hand, you're also leading quite a concerted campaign with Wall Street, with big bankers to try to persuade the Republicans -- those who may be doubting this -- that they have to do this. So you're not sure?

GEITHNER: Well, we're not -- we're not leading that, because the business community is -- wants to make sure that people up there understand. You know, remember, there's a lot of new people up there, and this is a hard vote for people. And you know, there's been a little bit of a tradition that people play politics with this. So the business community is doing what we'd expect to make sure people up there don't miscalculate. And again, the people who would take this to edge, to the brink, they'll own responsibility for calling it to question, our credit worthiness, and that would not be a responsible thing to do.

I'll tell you what -- what's the hard thing to do. The hard thing is not to raise the debt limit, because Congress will always do that, and they recognize that. The hard thing is to try to take advantage of this moment, and get Republicans and Democrats to come together and lock in some reforms that will reduce our long-term deficits.

That's -- that's going to be -- that's really important to do, because the world is watching now. And they want to know that Washington takes these things seriously, and is willing to get ahead of this problem.

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