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Interview with Treasury Secretary Timothy Geithner

By The NewsHour, The NewsHour - April 13, 2011

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JIM LEHRER: And now to our newsmaker interview with Treasury Secretary Timothy Geithner.

Mr. Secretary, welcome.

TREASURY SECRETARY TIMOTHY GEITHNER: Nice to see you, Jim.

JIM LEHRER: In general, the House Republican leadership said that the president's speech today was - was not a plan; it was a political statement based on his re-election campaign.

What do you think about that?

TIMOTHY GEITHNER: Well, you know, I sat with the president and the leadership off both houses, both parties, this morning at the White House.

And, actually, I think we came away from that more optimistic, more confident that this is a moment where we have a chance to get both sides to come together and lock the Congress into a comprehensive, balanced, responsible plan to bring our deficits down over time.

I think everybody recognizes this is the necessary thing to do. It's something we can do. It's something we have to do. And if you listen to people carefully, we agree on a lot. We agree on a $4 trillion objective for reducing the deficits. We agree we need to bring them down in a way that allows us to start to pay down our debt burden.

We have big disagreements on how to do it, but that's a pretty good place to start. And if we can take advantage of this opportunity to get the Congress to lock itself into a set of constraints that allow us to live within our means, that would be an enormously positive accomplishment. It would be very helpful for recovery, make Americans more confident Washington can work.

And, again, listening to people talk a little carefully, people say -- you have to say a bunch of things as politicians, but if you listen carefully to what they're saying, I would say a little more optimistic.

JIM LEHRER: I was listening very carefully to what the president said. He said there is no way he is going to permit the taxes for the wealthy, for the upper-income group in America to get a tax cut, period. He said it twice: No way.

And the Republicans said just the opposite: We will never support anything that has to do with raising taxes.

Now, what did I miss?

(LAUGHTER)

TIMOTHY GEITHNER: Well, you're right that there's a fundamental disagreement here.

But let's talk about what's at stake. If you look at the most fortunate 2 percent of Americans today, their actual tax rates are very low. They pay a relatively small share of income relative to in the past. And if this country wants to keep those rates where they are, then we have to do one of two things.

We have to either cut savagely deeply into basic commitments for our seniors, for the disabled, for the poor, or you have to ask me and my successors to go out and borrow hundreds of billions of dollars, trillions of dollars over time from our children, from foreign investors, from the Chinese, to make that possible.

Now, it's not responsible to go out and borrow to finance those tax cuts. You can't afford them. And it is not necessary to solve our fiscal -- in order to solve our fiscal problems, to cut so deeply into basic commitments generations of Americans have made to the elderly and to the poor.

So, we do disagree on how to do this, but we both agree it's necessary, it's important to get these deficits on a downward path. And that requires the Congress commit itself to live within a set of constraints so that the country can live within our means.

Now, of course, we want to do that in a way that preserves our capacity to invest in things that are critical to how we grow in the future, in education, in basic science, in research and innovation. We want to maintain those commitments to the elderly and to the poor and to the disabled.

And we want to make sure that we're fair to the middle class, we don't leave them with a larger burden than they already bear today. Those things are completely achievable to do. We just have to decide to do that. And it's important for people to understand that this is going to be hard to do, because our deficits are very high.

They're unsustainably high. But it's something we can do, and we can do with acceptable costs for the economy as a whole. But we have to do it right, in the right way, in the responsible way.

JIM LEHRER: But can it be done without raising taxes?

TIMOTHY GEITHNER: Oh, no. There is no -- no plausible way.

JIM LEHRER: No way?

TIMOTHY GEITHNER: Again, unless you're going to cut deeply into commitments we have made to seniors and to the disabled and to the poor, or ask the country to go borrow the money, you can't solve this.

And, again, that's what -- that's the conclusion that the bipartisan fiscal commission reached. That's the premise in which a bipartisan group of senators have been operating on. And it's a -- it's a basic reality that we're going to have to live with over time.

Now, it's true we're apart on this, but that's a good debate for the country to have.

JIM LEHRER: But it's huge. But it's huge -- hugely apart, right?

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