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World/National News

October 12, 2013

G-20 finance officials focus on US budget talks

WASHINGTON (AP) — World finance officials said Friday the United States needs to take urgent action to address its budget problems that are creating economic uncertainties for the global economy.

Finance ministers and central bank leaders for the Group of 20 major economies wrapped up two days of discussions in Washington with a joint statement expressing concern about the ongoing budget stalemate between Congress and the Obama administration.

Russian Finance Minister Anton Siluanov told reporters at a news conference that issues of the partial government shutdown, and the need to raise America’s borrowing limit before a Thursday deadline, were addressed by Treasury Secretary Jacob Lew. Federal Reserve Chairman Ben Bernanke also participated in the talks.

Siluanov said all the G-20 participants are hoping for a speedy resolution. He noted that about 45 percent of Russian’s foreign exchange reserves are invested in U.S. Treasury securities. America will run out of borrowing authority for new debt on Thursday. Lew has warned that with only $30 billion expected cash on hand at that time, the country will soon not have the ability to meet all of its bills, including paying interest on the $16.7 trillion federal debt. That would trigger an unprecedented default on U.S. debt.

Underscoring the urgency of the situation, Lew left the G-20 discussions before they had wrapped up Friday to get to the White House for a meeting with President Barack Obama and Senate Republicans.

In remarks to the finance officials released by Treasury, Lew said that the United States understood the role it plays as “the anchor of the international financial system.” He said the administration is continuing to push Congress to reopen the government and increase the borrowing limit.

“Prior to the government shutdown, all signs pointed to the strengthening recovery of the U.S. economy,” Lew said. “If Congress acts quickly, this will continue to be the case.”

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