Billionaire philanthropist Warren Buffett and Goldman Sachs CEO David Solomon on Tuesday urged Congress to extend the Paycheck Protection Program, with Buffett saying the country is fighting an “economic war” amid the coronavirus pandemic in which small businesses have become “collateral damage.”
“We need another injection to complete the job,” Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., told CNBC’s “Squawk Box” in a phone interview Tuesday. “Congress is debating that right now, and I hope very much that they extend the PPP.”
“It’s so important that small businesses, which have become collateral damage in a war that our country needed to fight, but we, in effect, voluntarily had an induced shut down of parts of the economy, and it hit many types of small businesses very, very hard,” Buffett explained.
“We made some provision for that in March in terms of the CARES Act, but then nobody really knew how long this self-inflicted recession would last with this particular effect on small businesses,” he added.
“I think the country owes it to the millions of small-business people … just renew the PPP and get us to the end of the tunnel,” Buffett continued. “When we went into World War II, a lot of industries were shut down; everything went to the defense production. Well, we’ve shut down a lot of people in this particular induced recession and others are prospering, and I think the country owes it to the really millions of small-business people.”
Solomon said in the joint interview that while an end to the pandemic is in sight with vaccine distribution beginning in the country on Monday, small businesses still need support.
“The steps that the Fed and Treasury took to put liquidity into the market have certainly helped large businesses,” Solomon said. “But small businesses don’t have that access.”
This comes as top congressional leaders were scheduled to meet Tuesday afternoon to finalize a government funding bill and an agreement on coronavirus relief following weeks of negotiations.
Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.), Senate Minority Leader Charles Schumer (D-N.Y.) and House Minority Leader Kevin McCarthy (R-Calif.) were set to meet late Tuesday afternoon to discuss both issues, two sources and a senior Democratic aide confirmed to The Hill.
A group of bipartisan senators introduced a $908 billion coronavirus package on Monday. In an effort to make it easier for leadership to pick pieces of their legislation, they broke it into two bills.
One of the bills includes about $300 billion to support small businesses, as well as funds for vaccine distribution, schools and unemployment benefits. The second bill includes more money for state and local aid and protections against coronavirus-related lawsuits.
While Buffett acknowledged Tuesday there could be instances of fraud in stimulus programs, especially following a series of allegations of misuse of the Small Business Administration’s Covid-19 Economic Injury Disaster Loans, he added that this should not stop lawmakers from assisting small businesses.
“There will be fraud connected to it, if you try to do something huge like that,” Buffett said. “Don’t let that turn you away from something where millions of people were being helped.”