JAKE TAPPER: The latest jobs numbers are disappointing in a lot of ways. Larry Summers was on this broadcast in December and he said that the economy would be creating jobs by the spring. Do you still believe that to be true?

TIMOTHY GEITHNER: Absolutely. But remember where we were a year ago. You know, you had an economy that was shrinking at an annual rate of 6 percent. Three-quarters of a million Americans were losing their jobs every month. And the president acted with enormous force and care to get this economy growing again.

And the economy is now growing again. So we're seeing some encouraging signs of healing. This is going to take a while, and it's going to be uneven. But there's encouraging signs in this report. The unemployment came down modestly and created jobs back in November.

And our job, our responsibility is to make sure we're working very hard to reinforce this recovery. And we're seeing this growth that has just been established translate into more jobs.

TAPPER: How possible is it that we're going to have a double dip recession?

GEITHNER: I think we -- we have much, much lower risk of that today than at any time over the last 12 months or so. Again just think of where we are. We are in an economy that was growing at the rate of almost 6 percent of GDP in the fourth quarter of last year. The most rapid rate in six years. So we are beginning the process of healing.

And we have the capacity as a government to try to make sure we are reinforcing that process. And we help guide this economy back to the point where we're not just growing again, but we've seen growth translate into jobs. And that we're reaching the lives of all Americans.

TAPPER: I think a lot of Americans wonder if you're doing enough. There was a more than $800 billion stimulus package. They're talking now on the Hill about a more than $100 billion jobs package. But still, if you look at the budget that you guys introduced, you're still projecting 10 percent unemployment this year, more than 9 percent next year, more than 8 percent next year.

I realize that's going in the right direction, but it's still a staggeringly high number of unemployed. Are you doing enough?

GEITHNER: We need to -- we have more work to do, absolutely we have more work to do. And you heard the president at the State of the Union say, we want to work with the Congress now to try to make sure we are creating incentives to create more jobs, we're encouraging business investment, we're putting resources into infrastructure, we're giving help to state and local governments.

And it is very important people understand that we have more work to do and we can afford that, it's important to it, our basic priority still is to make sure that this growth we're seeing now, which is very encouraging, translates into more jobs more quickly.

TAPPER: The new senator from Massachusetts, Scott Brown, one of the first things he said after being sworn in was that the stimulus package has not created one job.

BROWN:"The last stimulus bill didn't create one new job. And in some states, the money that was actually released hasn't even been used yet."

GEITHNER: Oh, I don't think there's any basis for that judgment. I mean, again, just think where we were. January of 2009, three-quarters of a million Americans losing their jobs. We have an economy now that's growing again. With growth you're going to see jobs created.

Again, we already saw some job -- a month where we had positive job growth. But, you know, it's going to take a while. It took a long time for these problems to develop. They're going to take some time to heal. But we're in a much stronger position today.

But our priority has to be, and I think you see broad recognition of this now, is to make sure we're working very hard to make sure that we're seeing this growth translate into more jobs to reach more Americans.

TAPPER: Some critics wonder how hard you're working when they look at, for instance, last March. You and the president introduced a program to shore up $15 billion in loans for small businesses. And according to the special inspector general for TARP, Neil Barofsky, no details for that plan have come out, none of that money has been disbursed, that's last March, it's the 7A program.

Have there been programs that you've introduced that just have not worked?

GEITHNER: Look, the programs that the president supported in the Recovery Act were very, very effective. You saw small -- lending by the Small Business Administration increase by more than 70 percent -- 75 percent from the lows. And we have been very effective at trying to make sure we're opening up the broader credit markets to companies around the world.

Again, remember where we were in January of last year. You know, if you were a company, large or small, if you were a family trying to borrow to buy a house or borrow to buy a car or put your kids in college, or you were a municipal government, you did not know whether you were going to be able to get a loan.

So it is tougher out -- it is tough out there still, but we have made dramatic progress in trying to make sure we bring stability to this financial system at much, much lower cost than anybody anticipated.

You know, again, last February, people thought it was going to cost maybe half a trillion dollars to put out this financial fire, and by getting private capital to come in and replace our investments, by allowing to bring those investments back out of the banking system, we've saved the taxpayer lots of money, and we have resources now we can use to try to make sure we're working very hard to meet our -- you know the many other challenges we face as a country.

TAPPER: Isn't the problem though not so much that the credit is not available, but that the businesses are not taking out the loans because nobody is buying anything?

GEITHNER: Well, again, you know, we had a huge shock to the American economy. And you're still living with the aftermath -- the aftershocks of that basic trauma. So businesses were very, very cautious. But if you look at what's happening today across the country, you're seeing again the first signs now of businesses starting to take some risk again, starting to invest again, and starting to add jobs back again.

But, you know, our job is to make sure we're working to reinforce that process.

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?

You and I know that the money, as Willie Sutton says, said, that -- why do you rob banks? Because that's where the money is. The money is in entitlement programs: Medicare, Medicaid, Social Security, things that you do not touch in this budget.

The fact that you need a bipartisan commission to recommend cuts or tax increases, doesn't that indicate that our political system is incapable of making these tough decisions?

GEITHNER: Jake, I am very confident in our ability as a country to bring people together and make sure we are solving these challenges and these problems. We've done it in the past, it is completely within our capacity to do as a country.

But of course, it requires you bringing people together across the aisle to step back from politics, to try to bring practical solutions to things that are very important to our future as a country. And the president is committed to do that.

We're going to give the Republican Party the chance to share in the responsibility and the burden and the privilege of trying to fix the things that were broken in this country.

TAPPER: Republicans are afraid this is just a back door for tax increases. Are you willing to say that tax increases are off the table for this commission? Let's sit down and talk about the long-term structural problems with entitlement spending?

GEITHNER: The president's view, and this is a view shared by many Republicans, and it builds on what we've seen with effective commissions in the past, like the Greenspan commission that President Reagan established to help restore the financial footing of Social Security, is that for this to work, you've got to bring people together to step back from politics, day-to-day politics, and to bring fresh ideas to solve these kind of problems.

That's the only way to do it, we think. And we're committed to doing that. We've got to do it on a bipartisan basis, and we're deeply serious about doing this.

TAPPER: The president, during his State of the Union address, also talked about a deficit of trust, the fact that Americans don't trust government.

OBAMA:"We have to recognize that we face more than a deficit of dollars right now; we face a deficit of trust. Deep and corrosive doubts about how Washington works."

TAPPER: Whether it's at your -- your time as head of the New York Fed, your time dealing with AIG, or your time as Treasury Secretary, do you think that you bear any responsibility for that deficit of trust?

GEITHNER: Oh, I -- let me just say that I feel very proud for the actions we took to help to stem the damage caused by this crisis. And I feel it's a great privilege to have been able to work with this president to move so quickly and effectively to again -- to bring an economy that was in free fall -- a financial system at the edge of collapse, and to begin the process of healing.

But we all recognize, and I deeply recognize that we have a lot more work to do. And we are working very hard to make sure that the American people understand that we're going to make sure they don't bear a penny of loss for solving this financial crisis. Again we've brought back a huge amount of the money that the government was forced to put in the financial system.

And we are working very hard right now to try to make sure we put in place strong reforms that provide basic protections to Americans from ever again facing this kind of crisis again.

TAPPER: A year ago when you and the president introduced the mortgage modification program&

OBAMA: "Under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. And this will enable as many as 3 to 4 million homeowners to modify the terms of their mortgages to avoid foreclosure."

TAPPER: If a year ago I had told you that today I'd be sitting here, and only 66,000 Americans had permanent mortgage modifications, would you have said at the time that that was a success?

GEITHNER: Oh, Jake, I think it's very important to recognize this program is providing very, very substantial cash flow relief right now to more than three quarters of a million Americans. And we -- we believe we're still on a path to be able to reach many, many more American households. And of course we're going to make sure that those temporary modifications translate into permanent modifications. But again...

(CROSSTALK)

TAPPER: But a lot of those temporary modifications were done verbally though. They weren't done with the paperwork that a lot of...

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GEITHNER: No. We're -- we're absolutely committed to make sure that translates into what we said it would, which is for eligible Americans -- they're getting permanent modifications that substantially lower their monthly payment. Now, Jake, remember like, you know, again for the average household that translates into hundreds and hundreds of dollars every month for them.

That is real benefits -- great -- has greater income for them to meet their basic needs. But again step back for a sec. In February and March of last year house prices were falling off the cliff. People thought house prices might fall another 20 -- 30 percent. And we've had six months now of early signs of stability in house prices. So what that means is millions and millions of Americans -- middle class families across the country are now seeing more stability, and what is a basic source of financial security for all Americans.

Those programs were enormously effective in helping again pull a housing market that was in near collapse back to the point now where you're seeing the signs of stability.

TAPPER: Recently the president introduced a way of attacking the issue of banks that are too big to fail. He called it the so-called, "Volcker rule." Some sources close to you said that you had some concerns about that rule. What were those concerns?

GEITHNER: Oh, I am committed, and the president is committed to make sure that the reform package Congress moves forward -- puts in place tough, conservative, effective constraints in risk taking on the largest institutions in the country. And I am very confident we're going to be able to do that. This is an important part of that.

And I'm very supportive again of this basic principle. You want to make sure that institutions that have the privilege of access to the safety net the government provides aren't allowed to use that to subsidize the kind of risky activity that could bring the financial institutions to the edge of collapse.

TAPPER: And you are also concerned that you want -- you didn't want these American firms to be unable to compete with the...

(CROSSTALK)

GEITHNER: Oh, of course. Of course. But I'm very confident we can make sure that we are working very closely to raise global standards around the world so we have a level playing field.

And you know we are -- we have -- we are going to have a much stronger financial system ahead than we had going into this crisis. Because we are going to make sure that again we're putting in place stronger protections against risk taking. And we're going to make sure that we work with countries around the world so that we're raising standards globally -- not just raising the United States.

TAPPER: Lastly when you came in, and you met with President Obama, you told them about five bombs that needed to be diffused. Fannie, Freddie -- some others. And you recently said -- you compared your experience to the movie, "The Hurt Locker."

GEITHNER: Oh, no. I wasn't comparing my experience. There's nothing like what we faced to what American soldiers face every day.

(CROSSTALK)

TAPPER: Still diffusing these bombs, even if they were theoretical economic bombs, was -- must have been very nerve racking.

GEITHNER: This was like nothing anybody in public office today, or in the last few decades have ever faced. It was the gravest most dangerous moment since the great depression of the United States. Again remember we had a -- we were in a situation where people were no longer sure they could safely keep their money in the strongest American banks.

It was catastrophic, and it translated directly into factories closing. Millions of people losing their jobs, and their homes. Economic -- it could be around the world came to a sudden stop. It was the gravest moment we've ever seen. And we were very, very effective, because of the leadership of the president, moving very quickly with enormous care and force to bring stability.

And those policies have got this economy growing again. And as I said we've been able to put out this financial fire at much, much lower cost than anybody anticipated. And what that means is we have much more resources now available to meet our long-term challenges.

TAPPER: I guess was, all I mean was,-- personally, even though I know you don't like talking about your personal life all that much, or your emotions all that...

(CROSSTALK)

GEITHNER: Right.

TAPPER: ... much publicly -- personally it must have been nerve racking.

GEITHNER: Oh, it was -- it was hard. But, you know, we were all very focused on what we could do. And you know, this -- this job -- these jobs are a little bit like the fireman. They're a little bit like the doctor. And they're a little bit like the people that go and try to diffuse bombs. It's a mix of those things. And I'm very proud of what we've been able to do. But of course I understand -- I -- ever minute with a recognition that we have a lot more work ahead of us.

TAPPER: Secretary Geithner, thanks so much for joining us. Really appreciate it.

GEITHNER: Nice to see you.