George Stephanopoulos Worries That Tiny 2012 Budget Cuts Will 'Hurt' the Recovery and 'Cost Jobs'
Apparently, cutting a $3.7 trillion budget by $21 billion will hurt the economy. Talking to Treasury Secretary Tim Geithner on Tuesday, Good Morning America's George Stephanopoulos worried about the just-agreed to debt deal: "But, don't you think that any deficit reduction now will hurt the attempts of the economy to recover?"
The former Clinton White House official turned journalist highlighted "economists who say cuts like this will make our weak economy weaker and cost Americans jobs." In total, Stephanopoulos raised the question three times, wondering, "So, this won't cost us jobs?"
Of course, the anchor didn't point out that there's almost no spending cuts before 2014, a mere $21 billion in 2012 and $42 billion in 2013.
The GMA host didn't even challenge Geithner's assertion that if the economy regresses into recession, it could be the fault of Republicans who opposed increasing the debt limit.
Geithner claimed that the "spectacle" Americans witnessed in Washington really damaged "the confidence, caused a lot of damage to confidence. "
To this, Stephanopoulos could only manage to mildly respond, "To the point where it could cause a double dip?"
The journalist also didn't mention that the economy expanded at 1.3 percent in the second quarter or that this was prior to the debt debate.
This isn't the first time, the network anchor hit Geithner from the left. On April 22, 2010, he pressed the Treasury Secretary on financial reform, wondering why the "big banks" shouldn't be "broken up."
A transcript of the August 2 segment, which aired at 7:09, can be found below:
GEORGE STEPHANOPOULOS: And now that the deal is all but done we face the big question of what it means for the economy and whether it's strong enough to preserve America's AAA credit rating. I put those questions to Treasury Secretary Tim Geithner in an exclusive interview and began by getting his response to economists who say cuts like this will make our weak economy weaker and cost Americans jobs.
TIM GEITHNER: Well, let's start with what this deal does. The most important thing is it creates more room for the private sector to grow because although it locks in some very substantial long-term savings, the near-term costs are very modest.
STEPHANOPOULOS: But, don't you think that any deficit reduction now will hurt the attempts of the economy to recover?
GEITHNER: Part of governing is recognize we live with- we don't have unlimited resources and we inherited and are left with unsustainable deficits long term and the President understands for the sake of the economy long term it's very important to demonstrate to the American people, to people around the world that we can get our arms around it.
STEPHANOPOULOS: So, this won't cost us jobs?
GEITHNER: No, it will not. Now, if we put this behind us, then we can turn back to the important challenge of trying to find ways to make sure that we do everything we can to get more people back to work, strengthen growth.
STEPHANOPOULOS: Yet, the President had to give up in this deal his call to extend the payroll tax cuts through next year.
GEITHNER: George, I'm very confident that's going to happen. You know, again, I've been part of all these discussions.
STEPHANOPOULOS: How can you be so sure?
GEITHNER: Well, because I think it will be very hard for Republicans to prevent that from happening. I think it's very hard for them to stand up and say they're going to try to block the extension of tax cut that is worth about a thousand dollars a year for the average American family, untenable for them to block that.
STEPHANOPOULOS: Are you sure that this economy is not going to slip back into recession?
GEITHNER: The economy is absolutely slower than we thought, really than anybody thought and it's happening around the world. And in the United States, I think confidence here was absolutely damaged by this spectacle they've seen in Washington of a significant number of elected officials in this country threatening default, really damaging the confidence, caused a lot of damage to confidence.
STEPHANOPOULOS: To the point where it could cause a double dip?
GEITHNER: I don't think that that risk right now is very significant. You know, the United States is a very strong very resilient economy. We're still among the most productive economy in the world.
STEPHANOPOULOS: But, we're not creating jobs.
GEITHNER: We're are. Not as fast as we like, but not creating jobs. 2. 2 million private sector jobs created since the job growth. started. That's not enough. Long way to go. That's just a function of how damaging the recession was.
STEPHANOPOULOS: There's also the real prospect even though default has likely been avoided that America could still lose its AAA credit rating. Some economists estimate it costs us $75 billion a year in interest costs, 600,000 jobs.
GEITHNER: If Americans, or investors around the world, lose confidence in the capacity of washington to deal with challenges then what you'll see is higher interest rates for all Americans.
STEPHANOPOULOS: Sounds like you're not sure a downgrade is going to be avoided?
GEITHNER: I can't- It's not my judgment to make and they have to make that judgment. But, you know, this is- in some ways a judgment on the capacity of Congress to act and what this deal does is put us in a much better position to make those tough choice.
STEPHANOPOULOS: Has the way this whole process unfolded made a downgrade more likely?
GEITHNER: I don't know. It's hard to tell. I think this is a good result but a terrible process.
STEPHANOPOULOS: You're Treasury Secretary of the United States. What goes through your mind when you read that bulletin that says, Apple Computer has more cash than the United States government?
GEITHNER: Well, I don't think that's the way we think of it. Again, the resources of this country-
STEPHANOPOULOS: But, it's true, isn't it?
GEITHNER: No. I wouldn't look at it that way. Our strength of our country is the basic strength of the economy long term. We're a very rich and strong country, very resilient long term.
STEPHANOPOULOS: Finally, you know this question is coming, earlier there had been some reports you would leave your post after a debt deal is reached. We're at that point.
GEITHNER: And the vote hasn't happened. The vote hasn't happened yet.
STEPHANOPOULOS: So when it passes-
GEITHNER: It's going to happen.
STEPHANOPOULOS: Is it fair to assume that now that it's done, you'll be leaving relatively soon?
GEITHNER: No, I mean I haven't made that decision yet and, you know, we got a lot of challenges, the president has a lot of challenges. And, you know, I got other pressures on me too, but I'll make that decision at the right moment.
STEPHANOPOULOS: Mr. Secretary, thanks for your time.