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Buffett Blasts Washington for 'Silly' Game of 'Russian Roulette'

Warren Buffett during CNBC live interview in Sun Valley, Idaho
Dave Grogan | CNBC
Warren Buffett during CNBC live interview in Sun Valley, Idaho

Warren Buffett tells CNBC that Congress is playing a "silly" game of "Russian roulette" by threatening not to raise the nation's debt limit as it debates deficit reduction. "We should be more grown up than that."

HOW BUFFETT WOULD FIX THE DEFICIT

In a live interview (full transcript here) on Squawk Box from Sun Valley, Idaho, where he's attending the annual Allen & Co. media conference, Buffett warned of "enormous disruption" if there's no deal to raise the U.S. debt limit.

What would happen if the Treasury does get to the point where it has run out of money?

"Nobody knows. I mean the odds are very good that people will assume we'll get things straightened out within a few days and nothing dramatic would happen. On the other hand, you're playing with fire when you don't need to play with fire. We don't need to tell the rest of the world that anytime people in Congress start throwing a tantrum that we're not going to pay our bills."

Buffett tells Becky Quick that the country's bills will be paid one way or the other, and Congress should address the situation with "maturity."

In Buffett's view, the country shouldn't be making such crucial decisions "at the point of a gun."—

He suggests some of America's biggest corporations could help prevent a U.S. default, if there's a gap of just a few days, by voluntarily pre-paying its September quarterly taxes. Berkshire, he says, would be willing to do so as an act of patriotism, and Buffett would "make a few calls" to his fellow CEOs.

As for changing a tax code that has "not been shaped by logic," Buffett repeats his long-standing advice: "I would go after the very rich." But, he says, it would take a combination of "leadership and outrage" to make significant changes when those who benefit from a particular aspect of the code will fight strongly to retain that advantage.

CNBC's Becky Quick and Warren Buffett in a live interview from Sun Valley, Idaho
CNBC/Dave Grogan
CNBC's Becky Quick and Warren Buffett in a live interview from Sun Valley, Idaho

On the U.S. economy, Buffett sees improvement in Berkshire's businesses, except for those associated with the construction industry, a sector that needs to play a "crucial" part in an economic rebound.

He believes people underestimate how much lagging home construction is keeping the unemployment rate high. Buffett predicts we'll be "amazed" at the improvement in employment once the construction sector inevitably rebounds.

Berkshire, he says, employs more people today than it did two months ago and will keep hiring. He thinks the construction sector may start significant hiring by the end of the year.

A factor in his expectations for a construction rebound is that in most places around the country, buying a house makes more financial sense than renting.

As he has said many times in the past, "It makes no sense to bet against America" for the long-term.

Buffett doesn't think the debt problems in Greece and the rest of Europe have been solved yet. He sees "real" problems. "They've got a lot of work to do."

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