What Makes the 'Fiscal Cliff' Like Pandas Mating
Producer, CNBC's "Squawk Box"
David Rubenstein, The Carlyle Group co-founder, told CNBC that "everybody is obsessed" with the "fiscal cliff" outside and inside the U.S., but his firm is not scaling back investments as a result because he believes it's "very likely a deal will be reached."
He believes Congress will work with the president to strike a deal to avoid the automatic $600 billion in tax increases and spending cuts set to go into effect next year. (Read More: Blackstone CEO Says Go Back to 'Square One' for 'Cliff' Solution)
It usually doesn't work that way, and that's why he thinks the partisanship in Congress is like pandas having sex, a comparison he brought up at The Atlantic's Washington Ideas Forum last month.
Pandas have a very narrow window during the year to mate, he explained, and their inexperience makes it difficult to conceive.
"It's like members of Congress. They know what they're supposed to do, but they don't do it quite as well as we'd like," he said.
Any agreement will include higher tax rates on ordinary income, as well as higher capital gains and dividends taxes, he told "Squawk Box" Wednesday. He thinks the rate on capital gains and dividends will increase to 20 percent from 15 percent.
Rubenstein does not believe that higher taxes will hurt the economy once a deal is done. "There will be enough confidence in our country and outside our country to invest more," he said.
But at The Carlyle, that uncertainty in Washington has not hindered investment at the private-equity firm. "We presume the fiscal cliff issue will be resolved, therefore we haven't stopped investing," said Rubenstein who was deputy assistant for domestic policy to Jimmy Carter. "We are investing, and relatively actively."
The Carlyle has $157 billion in assets under management across 101 funds and 64 funds of funds. Rubenstein said investors can expect a rate of return in the high net teens "17, 18, 19 percent."
—By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC