NEW YORK — Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., said Thursday he expects Congress to resolve a stalemate over the U.S. debt ceiling before it seriously harms the country.
“We will go right up to the point of extreme idiocy, but we won’t cross it,” he said Thursday in an interview on CNBC.
Republicans and Democrats are deadlocked on spending legislation, leading to a partial government shutdown and the furlough of about 800,000 federal employees. They’re also debating whether to raise the government’s borrowing authority. Failing to do so by Oct. 17 could trigger a default, President Barack Obama’s administration has said.
“If it goes one second beyond the debt limit, that will not do us in,” Buffett said. “If it goes a year beyond, I mean, that would be unbelievable.”
Republicans in the House stalled government-funding measures in an effort to delay or curtail the Affordable Care Act, Obama’s signature health-insurance law. Buffett faulted the approach by some Republicans to budget negotiations.
“When the United States government issues bonds, it says âthe full faith and credit of the United States,'” Buffett said. “It didn’t say âthe full faith and credit of the United States unless one political party is unhappy about some extraneous issue.'”
Buffett, 83, has supported the president’s health legislation. In an interview with Bloomberg Television’s Betty Liu last year, he said it’s a “step in the right direction” on the top challenges facing the United States and its businesses.
Representative Jeb Hensarling, chairman of the House Financial Services Committee, described a delay of the individual mandate to purchase health insurance as the “bare minimum” Republicans should accept as part of the spending bill. And, he said, the party should attach other conditions to the debt ceiling.
“What’s going to hurt our economy is our failure to deal with our spending trajectory, which is going to bankrupt us,” the Texas Republican has said. “Anything that has ever passed for fiscal responsibility in Washington, D.C. has almost exclusively been attached to a debt ceiling.”
Pacific Investment Management Co.’s Bill Gross and Goldman Sachs CEO Lloyd Blankfein are among financial executives who have said failing to raise the debt limit could disrupt the economy. Blankfein said Wednesday after a meeting with Obama that members of Congress shouldn’t use the nation’s borrowing limit for political goals.
“There’s a precedent for a government shutdown; there’s no precedent for a default,” Blankfein said. “You can re-litigate these policy issues in a political forum, but you shouldn’t use the threat of causing the U.S. to fail on its obligations to repay its debt as a cudgel.”
Henry Paulson, who ran New York-based Goldman Sachs before Blankfein and served as Treasury Department secretary under Republican George W. Bush, joined Buffett Thursday in the CNBC interview and agreed that Congress would resolve the dispute before too much damage is done to the country.
“These guys may threaten to take their mother hostage, but they’ll never hurt their mother,” Paulson said.