'This Week' Transcript: Treasury Secretary Timothy Geithner

George, Tim Geithner said that businesses are now starting to borrow because they are now starting to take on risk because we're emerging from this economic crisis. Is the economic crisis the only reason why businesses are hesitating?

WILL: No, I think there are a number of things. It's what they don't know and what they do know. What they don't know is what energy is going to cost. The president says he's going to push on with cap and trade, which would raise the cost of everything. They don't know what the cost of health care will be. The president says he's going to push on with health care reform.

Furthermore, they do know that their taxes are going to go up. The expiration of the Bush tax cuts on the rich are actually tax cuts largely on small business. Since the 1980s, the net -- almost all net new job creation has been in small start-up companies five years old or younger.

Furthermore, they know that interest rates eventually are going to go up. They can't go down. They're zero now. So any increase in interest rates is going to be adverse.

To add that to the fact that 42 cents of every dollar Washington spends this year is borrowed, and you add that to the fact that in 2009, every penny of tax revenues was spent before an appropriations bill was passed. That is on entitlement programs or interest rates. That's why they're worried.

TAPPER: John, just -- I know you don't agree with everything George said...


... but...

PODESTA: I don't know what George is proposing. It seems to me that if -- the other thing we absolutely know is that if we return to the policies that got into this mess, it's going to produce the same result. So I think the president has to move forward with trying to reform the health care system, which is now eating up more than 17 percent of our gross domestic product...

TAPPER: How? What's the direction on that?

PODESTA: Well, I think that he's going to press ahead to try to get reform done either through some combination of passing the Senate- passed health care reform bill with some fixes or perhaps a substantial package that would reduce overall costs in the health care system and expand coverage, but somewhat scaled-back package, but I think he's going to try to do it this year, and I think he's going to try to get us off of our so-called addiction -- I remember that phrase from George W. Bush -- addiction to foreign oil and try to create an innovative energy economy.

So there's a lot of work to do, as Tim Geithner said. They've got to really thread the eye of a needle to create jobs in the short term, but to deal with the long-term deficit problems that the country faces.

MARCUS: I'm going to find one common area of agreement with George, which is that I agree that the businesses are loathe to start borrowing and to start creating jobs, but I disagree almost entirely with all the reasons that George said that that exists.

It's not because of fear of higher taxes. Most of it, it's -- a very, very small sliver of small businesses would be affected by higher taxes.

It's not because of not knowing about health care costs or energy costs. It's because of a fundamental concern -- which is completely justified -- about the future path of the economy short term.

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