“I don’t see any reason why they should be paying a special tax,” said Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., in an interview on Bloomberg Television today.
This prompted “Fox & Friends” host Brian Kilmeade to ask Fox Business anchor Stuart Varney, “The President might have lost Warren Buffett as an ally … how do you explain this?”
Varney interjected saying “he has” and replied, “He’s also upset at where that rescue money, the bailout money was spent. This stimulus plan number one, $787 billion, wasn’t spent very well and he’s right. This is a very important retreat from a big supporter of Obama – retreating from that support.”
Obama’s plan to charge roughly 50 of the largest banks $90 billion over 10 years in order to recoup “every single dime” of the TARP money was announced Jan. 14. Fannie Mae, Freddie Mac and the auto companies would be exempt from the tax even though they are responsible for much of the losses.
According to the Wall Street Journal, the six largest banks – Goldman Sachs, JP Morgan Chase, Morgan Stanley, Citigroup Inc., Bank of America, and Wells Fargo & Co. – will bear most of the burden for this punitive bank tax if it is approved by Congress. The tax bill for each bank would range from more than $1 billion to more than $2.4 billion per year for 10 years the Journal said.
Obama and his press secretary have said the tax is not a punishment, but Buffett disagreed. He told Bloomberg the people proposing “are trying to punish people. I don’t see the rationale for it.”
In that interview, Buffett also stated what BB&T’s former CEO John Allison and others have claimed, that “most of the banks didn’t need to be saved.” Allison has said that his bank and others were strong-armed into taking TARP funds.
Buffett may very well be upset about the way the stimulus was spent as Varney suggested. He was a supporter of the financial rescue and was used by journalists including Katie Couric to challenge opponents of the Economic Stabilization Act of 2008.
After an initial attempt to pass the bill failed, Couric harshly questioned House Minority Leader Rep. John Boehner, R-Ohio.
“Congressman Boehner, Warren Buffett warned if Congress doesn’t act, quote, ‘there would be the biggest financial meltdown in American history.’ What in the world are you people doing?” Couric asked without pointing out that Boehner supported the bill against the majority of his party.