When: Today, Wednesday, April 25th at 4PM ET

Where: CNBC’s “Closing Bell with Maria Bartiromo

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Treasury Secretary Timothy Geithner today, April 25th, on CNBC’s “Closing Bell with Maria Bartiromo” at 4PM ET.

All references must be sourced to CNBC.

JOHN HARWOOD: Secretary Geithner, thanks for joining us.

TIMOTHY GEITHNER: Good to see you, John.

JOHN HARWOOD: We now know that the United Kingdom's in recession, the Euro Zone in recession. Are we now looking at the prospect of another springtime disappointment after positive economic signs as we experienced in 2010 and 2011?

TIMOTHY GEITHNER: Well, you're right to remind people that we live in a global economy. We're not an island of prosperity unto ourselves. And so we get affected by what happens beyond our shows. And, you know, we saw in 2010 and 11 as the economy was recovering, you know, we hit by Europe, by oil, by Japan. That caused growth to slow here.

But we're gradually getting stronger. We're in much stronger shape than we were even six, nine, 12 months, 18 months ago. And Europe is doing a better job of managing their crisis. So even though growth is weak and they— even though they've got a really tough, long, hard road ahead of them, they've done a much better job of providing a measure of calm and stability. And they're putting a lot of— financial force behind these reform efforts. So again, I think that the most likely thing you're going to see is that Europe— contains the risk of a major cataclysm. They can let these reforms take some time to work. And our economy should continue to get gradually strengthened through that.

JOHN HARWOOD: I talked yesterday to Austan Goolsbee, the former chairman of the president's— economic advisors. He said he thinks odds are at least 50-50 that private forecasters are right and that we're looking at growth of two and— or two and a half percent in G.D.P. And if it's at that level, you can kiss job market improvements goodbye. Is the administration helpless to do anything about that?

TIMOTHY GEITHNER: Well, the most important thing, the most valuable thing we could do for the economy now is for Congress to act to pass some concrete things that would— to strengthen infrastructure, help export growth, help Americans refinance their mortgages, take advantage of lower rates, prevent student loan rates from increasing, as you heard the president talk about this week.

Those are four very simple concrete things that traditionally have bipartisan support. There's no reason for Congress not to do those things. And they would make the economy stronger. But again, I think most private businesses forecasters look at the American economy, they see the economy growing between 2% and 3%. Not— surprising— as we dig out of this recession. But it's looking more resilient and the strength is more broad-based.

And again, you see it in agriculture, in energy, in manufacturing, as you're seeing in Oregon Iron Works today, in high tech. The— strength is more broad-based. And, you know, we're the most— still the most productive workers in the world. Huge amount of innovation (UNINTEL) in the American economy. And you're seeing that start to come back as heal the damage caused by the crisis.

JOHN HARWOOD: As you know— information like the fact that the U.K. is in recession is fueling debate over whether austerity policies are at odds with recovery. Wall Street Journal editorial page— had a piece today saying that Germany had done the world a favor by rejecting advice from President Obama and you to join the global spending party— in 2009. Why are they wrong?

TIMOTHY GEITHNER: Very good question, and an important big debate for the United States right now, too. But Germany did about the same level of actual stimulus we did in 2009. And they did it for the same reason we did, which is the world was burning. We were facing the risk of a second Great Depression. And we had to do everything necessary, everything possible to get the economy out of free fall and get growth starting.

And they were— their response was very similar to ours in that context. Right now, if you again, look what if you look at the challenges facing our— economy, too, although it's important for everybody to recognize we're going to have to act to bring our long-term deficits down. We have to do that in a way where we phase in the reforms, so they don't damage growth.

And it would be a terrible mistake, economically, for the United States, for us to lurch, prematurely, to extreme austerity, to severe austerity. That would— undo a huge amount of the progress we made repairing the damage from the crisis, would push unemployment up. It would push us back into recession. And we're not prepared to support that in this context.

JOHN HARWOOD: As we look— at this potential global slowdown and we get in the thick of the presidential campaign, there's an emerging critique from the other party that President Obama's a nice guy, well-intentioned guy, but that the world and United States' struggles economically are proof that he's in over his head. What do you say to that?

TIMOTHY GEITHNER: It's just— it's just politics. You know, I try very carefully not to be political in my job. I'm not a politician. And I try to focus on what's right for the economy. And again, if you look at what the president did, you know, he didn't sit back and let this crisis burn. He didn't commission a bunch of studies. He didn’t play politics with it. He acted with enormous courage, no political support from his opposition, and did— put together a remarkably effective rescue strategy for the American economy and the global economy.

And, you know, growth has been averaging. It's about two and a half percent since the economy began. We have more than four million private industry jobs created. And you're seeing, again, broad-based strength start to reemerge across the American economy, all because of the actions he took with no support except from The Federal Reserve in that context.

Now we're having a big debate, and we should have a debate, about what is going to make the economy stronger in the future. And there are big differences between the strategy the president's put in place and the strategy of his— of his opponents. And you see that— I'll just give you a couple examples. We live in a global economy, under a huge amount of competitor pressure, suffered an alarming erosion in the relative quality of American education, just an example of the quality of our infrastructure.

So a huge part of the president's strategy is a growth strategy, designed to improve opportunity by making sure Americans can take advantage of better educational training opportunities. We're rebuilding America's infrastructure. We're investing in innovation. And we're protecting the basic safety net for low-income Americans and seniors. Now we're going to— we can do all that and still put in a place a balanced plan to bring down our deficits over time.

That's our strategy. I'm very confident that's the right strategy for the country. It's a very different strategy than the strategy of our opponents, who are focused primarily on how to cut regulation, even in the financial sector, how to rollback health care reforms that— that provide health care to millions of Americans, and how to— and how to bring deficits down without asking even a modest additional burden, in terms of tax reform, on the top 2% of Americans.

JOHN HARWOOD: Well, of course, on the flip side, they argue that your plan, looking forward, in a second— Obama Administration is to raise taxes. Glenn Hubbard, who you know well, dean of the Columbia Business School, wrote a piece today saying that the president's spending commitments would require an 11% tax increase on people under $200,000 a year.

TIMOTHY GEITHNER: That's a completely made up, remarkably hackish observation for an economist. The president's fiscal reform plans, as you know— even according to the C.B.O., would bring our deficits down to below 3% of G.D.P. over the next four years, so that the debt burden stops growing as a share of the economy.

And in our plan, in our strategy, we propose a series of tax reforms that would modestly increase the burden, but only on the top 2% of Americans, only on the top 2% of Americans. 98% of Americans would see no increase in their effective tax burden. Now the alternative strategy of our opponents asks no additional burden on even the most fortunate Americans. And as a result puts a huge burden on reducing benefits for low-income Americans, for retirees. And would completely gut and erode our capacity to support things like education and infrastructure that are absolutely essential to our capacity to grow in the future.

So big differences in basic strategy. One of those differences is we believe as part of a balanced fiscal plan, as did Bowles-Simpson, as has every other bipartisan fiscal plan, we believe as part of a balanced strategy, you have to ask for a modest additional increase in revenues from the top per— 2% of Americans. Again, only 2% of Americans, the people in the most— in the strongest position to withstand that.

JOHN HARWOOD: Do you and does the administration accept any responsibility for the contribution that the prospect of higher taxes and increased regulation under Dodd-Frank that that would play any role in— slowing economic recovery?

TIMOTHY GEITHNER: A very good question. And it's worth— it's worth looking at this. It is true that we are putting in place some tough reforms on the financial system, 'cause we don't want the country to face the risk of another crisis like we've been through. You know, we're still living with the scars of the crisis. And the reasons why unemployment is so high today, while housing is still so hard, while this is still such a tough economy, is overwhelmingly because of the damage and the aftershocks of that basic crisis, which of course the financial sector was central to.

So absolutely, we're putting in place tough reforms on the financial sector. And we're providing better protections for Americans against pollution. And mercury, for example, where things could affect food safety. But there is no evidence to suggest that those regulations are having a material impact on slowing the economy down. I'll give you just a couple examples.

The profitability of the American business sector today is much higher than it was before the crisis. Investment spending, private equipment, is actually growing very rapidly, much more rapidly than the economy as a whole. So if— there was a plausible argument that regulation or the fear of regulation was holding back growth, you would not see the American business sector today looking so strong and so resilient. It's— a central problem in the narrative of the president's opponents. Because their basic narrative is the economy is slower than it should be, because the business sector in the United States is suffering. But again—

JOHN HARWOOD: —higher taxes slowing down—

TIMOTHY GEITHNER: And tax is a good example. Again—if again, if regulation or taxes or government were playing a role in this context, you would not s— see such a profitable American business sector. And you wouldn't see such strength in business investment, as investors— as companies bet on the future, bet on the basic emerging strength of the American economy. And remember, the debate we're having on taxes is just about whether 2% of American individuals and about 3% of small businesses would face a modest increase in their effective tax rates.

There's no plausible argument you can make that that modest increase in such a small fraction of the American economy is having a material effect on behavior today. Again— if— you just have to look at the evidence. And the business sector of the American economy is doing very well today. And they're doing where— very well today because of the incredible effectiveness of the president's strategy to rescue this economy from the crisis he inherited.

JOHN HARWOOD: From a different angle, not from the president's political opponents, but from the special inspector general over the TARP program. New report out today said the Treasury has failed to require— or incentivize increased lending in return for TARP funds. And it has no concrete plan to help small and medium-sized banks get out from TARP and get back on their feet.

TIMOTHY GEITHNER: Good question, but the evidence is all on the other side. Remember, this is a program that was remarkably successful in rescuing the economy from a broken financial system. And it's going to earn for the taxpayers of the United States, these are the bank investments, somewhere in the range of $20 billion. A program people thought— many of our overseers thought would cost the American people hundreds of billions of dollars.

So first, remarkably effective program in stabilizing an economy that was burning, remarkably effective in getting lending started again. And lending has been growing at a pretty healthy rate now for several quarters, because of the success of those programs. It's going to earn a remarkably substantial positive return for the American taxpayer, billions and billions of dollars.

It is true that we still have investments outstanding. Not surprising. But we've done a very effective job of re-bringing back most of those investments. And we're going to very carefully manage the remaining investments, so that we can justify the risks that the taxpayer take in that context. But lending is growing and improving. And that— that's a sign of the basic positive impact these policies had.

JOHN HARWOOD: You're giving a speech in San Francisco on China tomorrow. You're going to Beijing for the strategic economic dialogue. As you know, Mitt Romney, the— presumptive Republican nominee has said that your administration and previous administrations have been played by the Chinese. He will fix that, negotiate more effectively, by declaring them a currency manipulator on day one.


JOHN HARWOOD: Why wouldn't that be a more effective strategy?

TIMOTHY GEITHNER: By just calling them a name? Like you can solve problems in the world, a very complicated world we live in, by calling people names?

JOHN HARWOOD: Well, tariffs would come with that name.

TIMOTHY GEITHNER: No— in his— in that strategy, he said, "I would name them a manipulator." But let's look at the basic record. Its true China presents a very complicated mix of opportunities and challenges for the American economy today. But our exports to China over the last few years have been growing very, very rapidly. China has let the exchange rate appreciate by roughly 13% against the dollar, in real terms, over that period of time.

The competitive playing field is shifting in our direction. We've been very aggressive in protecting the interest of American companies against China's unfair trade practice. And we're going to continue to do that. And— you're seeing the results of those policies have significant positive impact or the American economy. We're going to keep working to make sure that's the case.

Now we have challenges ahead, lots of unfinished business. You know, the— Chinese are still— there's a lot of piracy of U.S. property. They still provide huge subsidies…enterprises. And we're trying to walk those things back— into b— better protect American interests. But again, U.S. exports growing very rapidly, exchange rates significantly appreciated, more work to happen. But that's the results of a very successful and very tough strategy of the president.

JOHN HARWOOD: But you said it was just calling China a name. Mitt Romney has a record as a fairly sophisticated businessman. Why shouldn't Americans have more confidence in his ability to negotiate with China?

TIMOTHY GEITHNER: We have to judge the policies that we're proposing against the policies of the president's opponents. And again, the policies we're proposing are designed to improve the basic fundamental strength of the American economy, make sure that we're laying the foundation for stronger growth and more opportunity. And that requires recognizing that we have to not just cut things, we have to be able to invest in things like education, infrastructure, innovation—

JOHN HARWOOD: What would happen if you named—

TIMOTHY GEITHNER: —expand exports.

JOHN HARWOOD: —China a currency manipulator?

TIMOTHY GEITHNER: It would— nothing would happen, except you would diminish the incentive they have for us to move. It comes with no effective sanction or action. If it had been an effective way to get change in China, then bipartisan, Democrat and Republican presidents over time would have embraced that basic strategy.

TIMOTHY GEITHNER: But it had no— it had no merit as a basic strategy. And does carry the risk of a trade war, which is why there's so much opposition to that basic policy. But again, if you look at the basic evidence of what's happening in China, it's encouraging and promising. It'll help make sure that we have more things that are— we're building in the United States. We can export to China. Like you're seeing in Portland today.

JOHN HARWOOD: Wal-Mart— recently has lost a huge proportion of its market value as a result of a controversy over potential violations of the Foreign Corrupt Practices Act. There's now and S.E.C. investigation of Hollywood on whether or not— improper payments were involved in some marketing opening there. How extensive of a problem do you believe it is for— that American companies would be in violation of that act?

TIMOTHY GEITHNER: You know, I don't have a good feel for it, John, and don't feel I can comment on those— on either of those two cases. But I will say the following. That I think that it's very important for the confidence of Americans in their government that we have very strong, very effective oversight capacity to enforce the basic laws of a land.

Now that's true in the financial sector in particular, but it's true generally. And I think we're trying to rebuild that trust and confidence by making sure that these regulators have the resources they need, the tools, and the authority they need to— do a better job of providing a basic sense of— protection for the American—

JOHN HARWOOD: If a corporate executive said to you, "Competitive world. We've got to do whatever we can to get an advantage. Other people are doing it." What would you say to them?

TIMOTHY GEITHNER: I'd say, "You got to follow the law of the land. And you got to make sure that you're honoring the letter and the spirit of the laws that you are governed by, in that context." And again, we're going to make sure we have strong, consistent, credible enforcement of those rules.

JOHN HARWOOD: And finally— as you know, there was a report— quoting your father-in-law the other day, suggesting that—

TIMOTHY GEITHNER: Allegedly quoting, I think is the way to say it.

JOHN HARWOOD: Yes. That the president's appointment of the president of Dartmouth to be the head of The World Bank was connected with a plan to have you become the president of Dartmouth. A) Do you want to become the president of Dartmouth? And B) was that part of the decision making in the president's—


JOHN HARWOOD: —selection.

TIMOTHY GEITHNER: Completely contrived myth. Played no role in that context. You know, as you know, the president asked me to stay in this job. I agreed to stay until the end of my first term. And I'm focused right now on trying to make sure I help this president make this economy stronger. And we've got a lot of challenges ahead of us.

JOHN HARWOOD: Do you want to be president—

TIMOTHY GEITHNER: But no merit to—

JOHN HARWOOD: —of Dartmouth?

TIMOTHY GEITHNER: —those two choices. No merit— no merit to those two reports.

JOHN HARWOOD: Have you talked to your father-in-law about it?


JOHN HARWOOD: About the report?

TIMOTHY GEITHNER: He called me about it. He did.

JOHN HARWOOD: And what did he say?

TIMOTHY GEITHNER: He said, "I didn't say that."

JOHN HARWOOD: Thanks very much, sir.

TIMOTHY GEITHNER: Nice to see you. Nice to talk to you.

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