G-20 Tells U.S. to Avoid Fiscal Cliff as Focus Widens

Global finance chiefs pressed the U.S. to avoid harming the fragile world economy with excessive austerity, widening their focus on fiscal challenges beyond concerns over Europe’s debt woes.

On the eve of the U.S. presidential election, Group of 20 finance ministers and central bankers meeting in Mexico City pushed for swift action to prevent the $607 billion in tax increases and spending cuts that will hit in January unless lawmakers act.

As President Barack Obama and Republican Mitt Romney tussle for the White House, the fear of foreign officials is that failure to limit the damage of the so-called fiscal cliff would tip the world’s largest economy into recession and drag their countries down with it. Europe, the subject of the G-20’s ire for the past three years, remained under pressure amid calls to take promised crisis-fighting steps.

A draft of the statement to be issued by the G-20 identifies the potential for sharp fiscal pullback in the U.S. and Japan as a danger to an already modest expansion, said an official from one of the countries who declined to be identified because the text hasn’t been finalized.