“Straight up to the point of extreme idiocy, but we won’t cross it” predicts Buffett

Buffett & Obama

Warren Buffett, the billionaire chairman and CEO of Berkshire Hathaway Inc, said he expects the United States Congress to resolve a stalemate over the US 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 today in an interview on CNBC.

Republicans and Democrats are deadlocked on spending legislation, leading to a partial US 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 US 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 ‘the full faith and credit of the United States,’” Buffett said. “It didn’t say ‘the 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 US 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.”

Henry Paulson, who ran New York-based Goldman Sachs before Blankfein and served as Treasury Department secretary under Republican George W. Bush, joined Buffett 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.