Email Calls for The Buffet Rule to Fix Congress-Mostly Fiction!
Summary of eRumor:
A chain email that has been in circulation since at least 2011 discusses Warren Buffet’s five-minute plan, known as the “The Buffet Rule,” to fix Congress for good.
The Truth:
During a 2011 interview, Warren Buffet said he could end the federal deficit and fix Congress in less than five minutes using what has become known as “The Buffet Rule” — but Buffet’s reps later said he wasn’t making a serious policy proposal.
Buffet made the comment that gave rise to “The Buffet Rule” email during an interview with CNBC’s Becky Quick. And the comment has since been attached to chain emails and blog posts about the Congressional Reform Act. Recently, the Buffet Rule has begun trending again with claims about the Congressional Reform Act of 2017 (more on that later).
The exchange came during a discussion about the federal deficit and congressional turmoil as Democrats and Republicans faced a budget standoff that later resulted in the federal government temporarily shutting down:
BUFFETT: And that’s a real question and the question is whether you’re better off making decisions on those things at the point of a gun or whether there’s enough maturity in a Congress that they face this, just like they faced 120 percent debt of GDP back after World War II. You know, we’ve got…
BECKY: But these problems — these problems aren’t new. These problems aren’t problems that have built up over decades and there hasn’t been a Congress that’s been mature enough or a president that’s been mature enough to take this head on.
BUFFETT: I can — I can— I can end the deficit in five minutes.
BECKY: How?
BUFFETT: You just pass a law that says that any time there’s a deficit of more than 3 percent of GDP, all sitting members of Congress are ineligible for re-election. Yeah. Yeah. Now you’ve got the incentives in the right place, right? So it’s capable of being done. And they’re trying to use the incentive now we’re going to blow your brains out, America, you know, in terms of your— of your— in terms of your debt worthiness over time, and that’s being used as a threat. A more effective threat would be just to say if you guys can’t get it done, we’ll get some other guys to get it down. And incidentally, we had— we had Simpson-Bowles, you know, almost eight or 10 months ago.
Buffet’s “proposal” to pass a law that says sitting members of Congress can’t seek reelection if the federal deficit is more than 3 percent of GDP immediately went viral. It appears that Buffets quote, or at least a version of Buffet’s quote, was attached to the beginning of a chain email about the 2011 Congressional Reform Act that was already in widespread circulation.
However, a representative from Buffet’s Berkshire-Hathaway company later told the Wall Street Journal in an email that Buffet had proposed the “Buffet Rule” to prove a point about the effectiveness good incentives — not to make a serious policy proposal:
In an email, a Berkshire spokeswoman said that the company has heard from quite a few people who have received the chain letter, but that (and this is a shocker) Buffett had never suggested someone start one. In fact, the spokeswoman wrote that he never even meant it as a serious proposal and just wanted to emphasize the importance of proper incentives.
And CNBC later updated a story on Quick’s interview with Buffet to clarify that his proposal would be extremely difficult to carry out because the very people who would lose their jobs because of it (congressmen) would be the ones who’d have to approve it:
An attorney in St. Louis, Jarrad Holst, points out by email that there is a way to enact Buffett’s idea without the cooperation of Congress. Under Article V of the U.S. Constitution, a “Convention for proposing Amendments” is convened when called for by the legislatures of two-thirds of the states. A proposed amendment would then need to be ratified by the legislatures of three-quarters of the states. If that happens, and it is a very, very big if, Buffett’s deficit plan would become the law of the land. That process would, however, take more than five minutes.
And we thoroughly investigated the email’s specific claims about the Congressional Reform Act back in 2011 and found every one of them to be “fiction.” You can read our entire report here. By the end of 2016, however, the rumor was circulating yet again. This time, the exact same points were being attached to the so-called Congressional Reform Act of 2017. So, although emails about the Buffet Rule and the Congressional Reform Act go viral at the beginning of each year, they’re all based on the same claims that are “mostly fiction.”