Warren Buffett: U.S. must do more to fight this key problem

OMAHA, Neb. - Billionaire Warren Buffett says America will continue to prosper overall, but government and philanthropy should do more to ensure that pockets of poverty don't continue to make it difficult for some to succeed.

"The American dream has succeeded in aggregate. We have failed, in my view, to create the equality of opportunity," Buffett said Tuesday at the national Purpose Built Communities conference in Omaha.

Buffett is one of the financial supporters behind the Atlanta-based nonprofit group, which helps communities work to redevelop high poverty areas.

Buffett said government should do more to ensure everyone has an equal opportunity to succeed through measures such as the earned income tax credit. And the investor who leads Omaha, Nebraska-based Berkshire Hathaway said he favors increasing the estate tax instead of eliminating it as Republicans have proposed.

"We've got the aggregate resources to take care of everybody," Buffett said.

On a local level, Buffett says communities can make a difference by tackling poverty from all sides with new housing that appeals to people with different incomes, better schools and other community improvements. That's the model Purpose Built advocates.

Buffett said history shows that the old model of housing projects filled with low-income residents doesn't work very well. Having a mix of income levels and races living together is more successful.

"You're learning from your surroundings all the time," Buffett said.

Selling the Purpose Built Communities approach is easier now because there are successful projects to show off in Atlanta, Indianapolis and more than a dozen other communities, Buffett said. A similar redevelopment project in northeast Omaha is just renting to its first residents.

"People like to fund successful ideas," said Buffett, who pledged to give his own fortune to five foundations over time and encourages other billionaires to become philanthropists.

But it's important that the local community is involved in these major redevelopment projects.

"The community has to get involved," Buffett said. "It doesn't work if you go in and try to do everything for them."

Representatives from more than 50 cities are attending this week's conference.