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CNBC EXCLUSIVE: CNBC TRANSCRIPT: LAWRENCE SUMMERS, WHITE HOUSE NATIONAL ECONOMIC COUNCIL, ON CNBC'S "SQUAWK BOX" TODAY

Treasury Secretary Nominee Lawrence Summers
CNBC.com
Treasury Secretary Nominee Lawrence Summers

WHEN: TODAY, THURSDAY, SEPTEMBER 16TH

WHERE: CNBC'S "SQUAWK BOX"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Lawrence Summers, White House Economic Council, today on CNBC's "Squawk Box."

All references must be sourced to CNBC.

QUINTANILLA: JOINING US EXCLUSIVELY ON CNBC IS LARRY SUMMERS, THE WHITE HOUSE NATIONAL ECONOMIC COUNCIL DIRECTOR, FORMER PRESIDENT OF HARVARD UNIVERSITY, FORMER CHIEF ECONOMIST AT THE WORLD BANK FORMER EVERYTHING PRACTICALLY. GOOD TO HAVE YOU WITH US. GOOD MORNING TO YOU.

SUMMERS: GLAD TO BE WITH YOU.

QUINTANILLA : WE BROUGHT YOU ON TO TALK ABOUT COMPETITIVENESS OBVIOUSLY. I HOPE YOU WON'T MIND A LITTLE HOUSEKEEPING. I KNOW YOU CAN'T COMMENT DIRECTLY ON JOBLESS CLAIMS THIS MORNING. GIVEN THE DATA WE'VE GOTTEN IN THE LAST DAYS/WEEKS WHERE IS THE ECONOMY HEADING RIGHT NOW?

SUMMERS: THE RECOVERY IS CONTINUING, RECOVERIES FLUCTUATE, FRANKLY FOR SEVERAL WEEKS IN AUGUST IN PARTICULAR THE NUMBERS WERE QUITE DISAPPOINTING.THE NUMBERS HAVE BEEN SOMEWHAT BETTER IN THE LAST SEVERAL WEEKS.YOU KNOW, EXPERIENCE IS THAT IN THE AFTERMATH OF A FINANCIAL CRISIS, THE PROCESS OF GENERATING RECOVERY TAKES TIME. YOU HAVE TO DO EVERYTHING YOU CAN TO ACCELERATE THAT PROCESS. THAT'S WHAT THE PRESIDENT IS DOING WITH THE AMBITIOUS PROGRAM HE HAS PUT FORWARD. I THINK HE CAN LOOK FORWARD TO AN ECONOMIC RECOVERY THAT WILL PROGRESS AND THE HOPE IS THAT EVENTUALLY THE CONGRESS GOT IT TOGETHER TO PASS THE SMALL BUSINESS PROPOSALS THAT THE PRESIDENT HAD PUT FORWARD, THAT HAD BEEN BLOCKADED IN THE SENATE FOR A NUMBER OF MONTHS. THE PRESIDENT'S PROPOSED A NUMBER OF OTHER STEPS THAT ARE IMPORTANT FOR JOB CREATION IN THE SHORT RUN AND IMPORTANT FOR OUR COMPETITIVENESS IN THE LONG RUN. KINDS OF THINGS THAT PROFESSOR PORTER HAS EMPHASIZED IN HIS WORK. INVESTMENTS IN INFRASTRUCTURE, THAT KNIT THE ECONOMY TOGETHER. SUPPORT FOR RESEARCH AND DEVELOPMENT BY REDUCING UNCERTAINTY AND MAKING THE RND CREDIT PERMANENT. SUPPORT FOR CAPITAL INVESTMENT AT A TIME WHEN WE'VE GOT VAST CAPACITY TO IMPROVE THE POTENTIAL OF OUR ECONOMY, BY MOVING MORE TOWARD CLEAN ENERGY AND ENERGY EFFICIENCY, BY ACCELERATING THE IMPLEMENTATION OF INFORMATION TECHNOLOGY. AN EMPHASIS ON AMERICA AS A GLOBAL PLATFORM FOR PRODUCTION. THE PRESIDENT SET A CRUCIAL GOAL OF DOUBLING EXPORTS. BY MOVING FORWARD ON THESE MEASURES. AND THAT'S WHAT THE PRESIDENT IS TRYING TO DO. WORK WITH ANYONE WHO'S PREPARED TO WORK WITH HIM TO CUT THROUGH GRIDLOCK AND MOVE THE STEPS THAT WILL PUT PEOPLE BACK TO WORK, THAT WILL RAISE INCOMES, AND THAT WILL MAKE SURE THE UNITED STATES REMAINS NUMBER ONE IN INTERNATIONAL COMPETITION.

PROFESSOR PORTER : LARRY, THANK YOU FOR JOINING US.THERE'S BEEN A LOT OF CONCERN AT THE SCHOOL ABOUT THE FACT RIGHT NOW FOR SOME REASON, YOU KNOW, BUSINESS AND WASHINGTON DON'T SEEM TO. BE ON THE SAME PAGE. THERE'S A LOT OF UNEASE AND TENSION, A LOT OF SORT OF ACCUSATIONS GOING BACK AND FORTH. FIRST OF ALL, DO YOU AGREE WITH THAT? IF SO, WHY TO YOU THINK THAT'S HAPPENING? AND WHAT DO WE NEED TO DO ABOUT IT?

QUINTANILLA: MIKE, I THINK IT'S BEST TO LOOK FORWARD, AND THERE'S A GREAT DEAL THAT AT LEAST THE PART OF WASHINGTON THAT'S AT THIS END OF PENNSYLVANIA AVENUE, WANTS TO COOPERATE WITH BUSINESS ON STARTING FROM THE GOAL I HIGHLIGHTED OF DOUBLING EXPORTS OVER THE NEXT FIVE YEARS.IN FACT, JUST THIS MORNING THE PRESIDENT IS GOING TO BE MEETING WITH HIS EXPORT COUNCIL HEADED BY THE CEOs OF BOEING AND XEROX TO DISCUSS HOW WE CAN MORE EFFECTIVELY STAND UP FOR AMERICAN PRODUCERS IN INTERNATIONAL COMPETITION, TO DISCUSS HOW WE CAN REDUCE A VARIETY OF REGULATIONS, PARTICULARLY EXPORT CONTROLS THAT INHIBIT EXPORTS, TO DISCUSS LABOR FORCE NEEDS IN TERMS OF TRAINING AND SKILLED MANUFACTURING, TO DISCUSS THE TRADE AGENDA WITH A VIEW TO MAKING SURE THAT WE ARE MOVING FORWARD ON EXPORTING THERE'S OTHER AREAS THE ADMINISTRATION HAS EMERGED AS A MAJOR SUPPORTER IN INVESTMENTS IN RENEWABLE TECHNOLOGIES WHICH ARE CREATING VERY LARGE OPPORTUNITIES FOR SOME MAJOR AMERICAN BUSINESSES AND THAT'S A CRUCIAL SECTOR WHERE WE'RE GOING TO HAVE TO COMPETE EFFECTIVELY IN THE YEARS AHEAD. I THINK THERE'S A GREAT DEAL THAT WE CAN MOVE FORWARD AND COOPERATE ON.AND THAT'S WHERE THE FOCUS OUGHT TO BE.

QUINTANILLA: DR. SUMMERS, YOU TALK ABOUT MOVING FORWARD, AND YOU'RE RIGHT.A LOT OF BUSINESSES, I THINK, PROBABLY WOULD BE WILLING TO DO THAT.AND EXPORTS ARE A KEY.BUT HOW DO YOU REACT TO BUSINESSES THAT THEN SAY, WELL, WHY THE MIXED MESSAGE? WHY GOOD TALK ABOUT EXPORTS AND, YET, THEY WOULD ARGUE AN UNNECESSARILY AGGRESSIVE EPA OR AN UNNECESSARILY AGGRESSIVE ELIZABETH WARREN OR A COMMENT IN SOME FASHION ON THE POSSIBILITY OF TAX CUTS EXPIRING FOR THE WEALTHY?DO YOU UNDERSTAND OR EMPATHIZE WITH THEM WHO SAY THAT THE WHITE HOUSE IS SENDING CONFLICTING MESSAGES?

SUMMERS: LOOK, LET'S TAKE -- LET'S TAKE THE QUESTION OF TAX CUTS. WHICH DO YOU THINK WILL DO MORE TO MAKE AMERICA STRONGER? MAKING THE R & D TAX CREDIT PERMANENT AND EXPANDING IT, ALLOWING FIRST-YEAR TOTAL EXPENSING OF EQUIPMENT INVESTMENTS AT THIS CRUCIAL TIME FOR COMPETITIVENESS SO THAT INVESTMENT IS DRAWN TO THE UNITED STATES, OR SIMPLY PROVIDING -- SIMPLY PROVIDING A TAX CUT TO OUR WEALTHIEST CITIZENS? WHICH IS THE BETTER WAY TO SPEND THE TAX DOLLAR? WHICH IS THE BETTER WAY TO SPEND THE TAX DOLLAR WITH DEFICITS LOOMING AS SERIOUSLY AS THEY ARE, WHY IS NOW THE RIGHT MOMENT TO LOCK IN $700 BILLION OF TAX CUTS FOR 2% OF THE POPULATION WHEN WE COULD BE USING THOSE REVENUES TO STRENGTHEN INCENTIVES FOR INVESTMENT IN THE COUNTRY'S FUTURE? I THINK THE CASE IS PRETTY CLEAR, AND IF YOU LOOK AT WHAT THE VAST MAJORITY OF ECONOMISTS ARE SAYING ABOUT WHAT WILL STIMULATE THE ECONOMY MORE, IT'S MEASURES THAT ARE TARGETED AT INVESTMENT. IT'S MEASURES THAT ARE TARGETED AT RESEARCH AND -- RESEARCH AND DEVELOPMENT.SO I THINK THOSE ARE THE RIGHT STEPS FORWARD. IF YOU LOOK AT THE RECORD ON -- ON REGULATION, THE RECORD OF THE NEW RULES THAT THE ADMINISTRATION HAS PUT FORWARD AND YOU COMPARE THOSE WITH OTHER ADMINISTRATIONS IN THEIR FIRST TWO YEARS IN TERMS OF COST BENEFIT ANALYSIS, THIS ADMINISTRATION'S RECORD ACTUALLY STACKS UP VERY EFFECTIVELY.BUT I DON'T WANT TO -- I DON'T WANT TO MISLEAD YOU. THERE ARE SOME REAL DISAGREEMENTS. THE PREVIOUS ADMINISTRATION IN MANY AREAS HAD A PHILOSOPHY THAT MIGHT BE CALLED MARKET FUNDAMENTALISM. THAT TOOK THE POSITION THAT COMING INTO, YOU KNOW, IN THE PERIOD BEFORE 2007, THE MISSION OF THAT ADMINISTRATION IN THE FINANCIAL AREA WAS 100% TO DEREGULATE. THERE ARE PHOTO OPS OF SECRETARIES OF THE TREASURY AND OTHER SENIOR OFFICIALS LITERALLY TAKING SAWS TO BOOKS THAT CONTAINED REGULATIONS.YOU SAW WHAT HAPPENED. THAT'S NOT THIS ADMINISTRATION'S PHILOSOPHY. THIS ADMINISTRATION --

QUINTANILLA: DR. SUMMERS, IS THE PHILOSOPHY, THEN, TO MAKE UP FOR LOST TIME?AND IS THERE A DANGER IN OVERCORRECTING?BECAUSE CLEARLY YOU LOOK AT THE COVER OF "FORBE'S" WHERE THE ARGUMENT IS MADE THAT THE PRESIDENT IS INHERENTLY OPPOSED TO BUSINESS FUNDAMENTALLY. IS THERE A DANGER THAT DEMOCRATS AND THE WHITE HOUSE COULD OVERCORRECT ON THAT FRONT?

SUMMERS: YOU KNOW, THERE ARE ALWAYS DANGERS IN MANY, MANY DIRECTIONS. HERE'S WHAT I KNOW. HERE'S WHAT YOU KNOW. WE HAD A MASSIVE FAILURE OF INADEQUATE REGULATION THAT LED TO A FINANCIAL CRISIS THAT WAS A DISASTER FOR ALMOST EVERY BUSINESS IN THIS COUNTRY. THAT, WE KNOW HAPPENED. AND THE ADMINISTRATION HAS MOVED TO ADDRESS THOSE -- THOSE PROBLEMS. THAT WE KNOW. IS THERE A RISK THAT OVERREGULATION COULD TAKE PLACE? ABSOLUTELY. THAT'S WHY EVERY REGULATION HAS TO BE REVIEWED SEPARATELY BY THE OFFICE OF MANAGEMENT AND BUDGET IN TERMS OF ITS IMPACT ON THE ECONOMY. THAT'S WHY THE ADMINISTRATION HAS INDICATED ITS COMMITMENT TO COST BENEFIT ANALYSIS IN REGULATION. SO, YES, OF COURSE, THESE QUESTIONS INVOLVE STRIKING A BALANCE. AND, OF COURSE, SOME PEOPLE ARE UPSET THAT ATTENTION IS BEING PAID TO CONSUMER PROTECTION ONCE AGAIN. NO DOUBT THE PEOPLE WHO HAD WRITTEN ELABORATE COMPUTER ALGORITHMS TO MAXIMIZE PEOPLE'S LEVEL -- MAXIMIZE THE NUMBER OF OVERDRAFTS PEOPLE HAD AND THEREFORE MAXIMIZE THE FEES THEY COULD GET ON OVERDRAFTS, NO DOUBT THOSE PEOPLE ARE CONCERNED THAT THEY'RE NOT GOING TO BE ABLE TO TAKE ADVANTAGE OF PEOPLE IN A NONTRANSPARENT WAY GOING FORWARD. I THINK THAT'S PROBABLY AS IT SHOULD BE. SO, YES, WE DO HAVE TO BE VERY ATTENTIVE TO THESE ISSUES. AS THE PRESIDENT HAS SAID, AS I HAVE SAID MANY TIMES, CONFIDENCES THE CHEAPEST FORM OF STIMULUS. AND WE'VE GOT TO BE VERY ATTENTIVE TO CREATING AN ECONOMIC ENVIRONMENT IN WHICH THERE IS CONFIDENCE. BUT THAT IS NOT AN ARGUMENT FOR A RETURN TO THE POLICIES OF NEAR TOTAL DEREGULATION THAT WE'VE SEEN AT SOME POINTS IN THE PAST.

QUINTANILLA: DR. SUMMERS, WE HAVE TO GO.I'LL ASK YOU JUST ONE QUICK QUESTION IF YOU CAN PUT IT IN ONE SENTENCE OR TWO.HAVE YOU ADVISED THE PRESIDENT THAT IF THERE'S A COMPROMISE TO BE MADE ON TAX CUTS, THAT HE SHOULD MAKE IT?

SUMMERS: I'VE ADVISED THE PRESIDENT THAT HE SHOULD PAY VERY CLOSE ATTENTION TO THE ECONOMIC IMPACT OF DIFFERENT TAX MEASURES, AND I'VE HIGHLIGHTED THAT THE EXPENSING PROVISIONS AND THE PERMANENT R & D CREDIT PROVISIONS THAT THE ADMINISTRATION IS PUSHING WILL, IN MY JUDGMENT AND THE JUDGMENT OF A VERY LARGE NUMBER OF OTHER ECONOMISTS, HAVE VERY IMPORTANT BENEFICIAL EFFECTS.

QUINTANILLA: DR. SUMMERS, THANK YOU VERY MUCH FOR YOUR TIME.LARRY SUMMERS IS THE DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL.

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