Warren Buffett Ups His Challenge To Congress To Pay Down The National Debt

Warren Buffett

[credit provider=”Bloomberg TV”]

Billionaire investor Warren Buffett upped a challenge he announced last week to Congressional Republicans in an interview with Bloomberg TV’s Betty Liu this morning, saying he would donate 15% of his 2011 income to the national deficit if 10% of Congress does the same.Previously, the chair of Berkshire Hathaway had said in an interview with Time Magazine that he would match every donation that Congressional Republicans made to pay down the national debt.

To put Buffett’s new challenge into perspective, the billionaire previously publicized an adjusted gross income of $62,855,038 in 2010.

Buffett—who is a Democrat—acknowledged in the interview that donations alone would not make a big difference to the $1.2 trillion of U.S. debt, but said the symbolic value of the action would give the American public more hope in the political system. 

“I think the American public want to see a sign of any kind that the members of Congress are treating this as seriously as it should be treated,” he said.

Buffett added that in the long run, the national deficit should average around 2% of GDP—which should be accomplished when income revenue from taxes are about 19% to 21%. Buffett, who has been supportive of President Barack Obama in the past, said he would support any candidate that can achieve that tax goal. Right now, the tax law is yielding about 16.9% of revenue, based on calculations given during the interview.

Since Buffett announced the challenge in Time earlier this month, only one politician has taken him up on the offer—Republican Congressman Scott Rigell of Virginia. The two exchanged letters last week about Buffett’s challenge, and in accepting Rigell’s offer Buffett also invited the Congressman to stop by any time he was in Omaha.

Well, Rigell took Buffett up on the offer quickly—he flew out to Omaha last night and had breakfast with Buffett this morning. The Congressman also participated in Buffett’s interview, during which the discussion focused primarily on the increasingly heated race among GOP candidates vying for the Republican presidential nomination.

When Liu asked Buffett about presidential hopeful Mitt Romney’s recent setback related to his tax returns, Buffett said he was not surprised.

“That’s exactly what I expected,” Buffett said of Romney’s 15% tax rate, which was revealed last week. “He makes money by moving around big bucks, not by straining his back.”

“I think Romney hurt himself. I think it was more Romney losing ground than Newt [Gingrich] gaining,” Buffett added, referring to the South Carolina primary results.

In a reference to the recent debate over income disparity and the Occupy Wall Street Movement, Liu asked Buffett if he would consider challenging major corporate CEOs or hedge fund managers to the same wager on donating to the national debt.

Buffett, however, said he did not think that would be an effective process to pay down the debt and it would instead turn into a press charade—he pointed out that he wanted policy change in the end. 

“You would see far more that wouldn’t do it, unfortunately, than those that would do it,” he said of challenging the 1% to pay down the deficit. 

Here’s a short clip from the interview, the whole discussion will be up soon: