'This Week' Transcript: Treasury Secretary Timothy Geithner

TAPPER: The Congress just voted to raise the debt ceiling to more than $14 trillion dollars. Moody's, the bond rater, just said, quote, "unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously than expected, the federal financial picture for the next decade will at some point put pressure on the triple-A government bond rating.

Is the United States going to lose its triple-A government bond rating? And what happens when the credit markets are no longer willing to buy U.S. debt?

GEITHNER: Absolutely not. And that will never happen to this country. And again, if you step back and look at what has happened throughout this crisis, when people were most worried about the stability of the world, they still found safety in Treasuries and the dollar. You're still seeing that every time. People are reminded again about the many challenges you see around the world.

That is a very, very important sign of basic confidence in our capacity as a country to work together to fix these problems. We've done it in the past. We -- this is within our capacity to do. And the best way to get there is going to make sure that this economy is growing again. That translates into more jobs that reach more Americans.

That's the only path to try to make sure that we're able to turn to -- fix our long-term fiscal problems.

TAPPER: Do you think the budget that the administration just introduced takes enough serious measures to reduce the debt? I see that there is some tinkering here with spending freeze, some tax increases, letting the Bush tax cuts expire for the wealthiest Americans. But do you think it's a serious attempt?

GEITHNER: Absolutely. Again, look what the president proposed. The president proposed to cap non-security discretionary spending.

TAPPER: That's only one-eighth of the budget.

GEITHNER: No, but that's a very important thing to do. And that requires -- you know, we have some very tough choices to make, and we outline in that budget some things that are going to be very unpopular and hard for people to make people understand or recognize we have some tough choices to make.

We work with Congress and the House passed yesterday the restoration of basic disciplines in budgeting that all Americans live with so that...

TAPPER: Pay-go...

(CROSSTALK)

GEITHNER: ... we have to make sure we pay for new programs. You're seeing, again, across the political spectrum now a basic recognition that deficits matter. Very good for people to understand, again, that deficits matter. That tax cuts aren't free. Got to pay for our programs. And we've proposed in the budget some important steps to restore some basic fairness to our tax code and begin the process of bringing down those deficits.

And again, the president's budget proposes to bring the deficit down from its current levels very, very sharply to below 4 percent of GDP over the next four years or so. And we want to work with Congress to set up a bipartisan commission to try to make sure that we're going beyond that to address our long-term problems.

TAPPER: Do you think the fact that you guys are pushing the bipartisan commission is indicative of the fact that our political system is not capable of taking on the serious challenges our nation faces?

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