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Buffett, GOP drift farther apart

NEW YORK — Warren Buffett, the self-made billionaire and son of a former Republican member of Congress, has widened the rift with his father's party by pressing for tax increases on the wealthy and reinforcing ties with President Barack Obama.

Buffett endured scorn from Republicans after he called the tea party approach to budget talks insane and proposed raising $500 billion by taxing the richest Americans. Buffett, chief executive officer of Berkshire Hathaway, was cited as an exemplar by Obama at least three times since July.

Buffett's criticism contrasts with praise he offered in the past decade to then-California Gov. Arnold Schwarzenegger and the political appointees of then-President George W. Bush. The tea party movement was faulted by Buffett for silencing other Republican voices. Buffett plans to hold a Sept. 30 fundraiser in New York City for Obama's re-election bid, Democratic officials said.

"He crossed the line from being an observer to being more of a participant," said Jeff Matthews, author of Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett. That, "to a lot of people, seemed kind of weird and prompted a hostile reaction."

Buffett, 81, has championed causes like abortion rights and the estate tax through his career, even as he cultivated relationships with Republican leaders. A Democrat, he was an economic adviser for Schwarzenegger's 2003 campaign and repeatedly praised Bush's picks for their handling of the 2008 credit crunch.

Buffett, whose fortune is valued at more than $35 billion, raised his voice as Democrats and Republicans sparred over a budget deficit of more than $1 trillion.

"I think Mr. Buffett needs a day job," Rep. Joe Walsh, an Illinois Republican elected with tea party support, said in an interview on Bloomberg Television's Inside Track. "These millionaires and billionaires are the folks that try to create jobs and grow the economy. The last thing we want to do is increase taxes on them right now."

Rep. Michele Bachmann, a candidate for the Republican presidential nomination, derided Buffett's tax proposal as a sound bite and suggested he donate his fortune to the government.

In the New York Times, Buffett said billionaires had been "coddled long enough" by Congress and proposed increasing some government revenue from capital gains that are currently taxed at 15 percent.

"Buffett has always been in favor of taxes, and he's always been in favor of a progressive scale," said Roger Lowenstein, author of Buffett: The Making of an American Capitalist. "What's new is that the Republican Party has moved to the right of Genghis Khan."

Alan "Ace" Greenberg, former CEO of Bear Stearns, is among executives who support Buffett's call for higher taxes on the wealthy.

"For him to pay less taxes percentagewise than what his secretary pays is ridiculous," said Greenberg, now at JPMorgan Chase.

'Pathetic' GOP debate

Buffett has said candidates for the Republican nomination have taken a "country be damned" approach to budget talks. The contestants were "pathetic" in an Aug. 11 debate when they indicated an unwillingness to accept $1 in revenue increases for every $10 in spending cuts, Buffett said.

Buffett faulted Republican members of Congress who refused to concede points to Obama in pursuit of a broader compromise. The negotiations were conducted under the threat of a U.S. default as Congress approached a deadline to raise the nation's borrowing limit.

Buffett evoked the image of House Speaker John Boehner and Senate Minority Leader Mitch McConnell, both Republicans, driving a car. He said the talks became a showdown with a Democratic car to see which would flinch to avert a collision.

"A group behind them said, 'Throw out the steering wheel, Mr. Speaker, and make those people realize that we're not going to agree to anything unless we get our way,' " Buffett said. "You feel they're insane. You lose. And the American people lost."

Buffett, GOP drift farther apart 08/30/11 [Last modified: Tuesday, August 30, 2011 10:10pm]
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