US Senate Approves Measure Voicing Concerns Over China Treasury Holdings

2010年 6月 10日 07:38

The U.S. Senate voted Wednesday to require the Obama administration to examine the risks associated with foreign holdings of U.S. debt, a new sign of political concern about the nation's fiscal state and China's economic influence.

The Senate approved an amendment to a broader economic-recovery bill that would mandate the administration produce quarterly reports to Congress about the associated economic and national-security dangers.

The amendment would require reports on all foreign holdings of U.S. debt, both government and private, but it was targeted largely at China. The amendment warned the country's sizable holdings of U.S. debt 'could give China a tool with which China can try to manipulate domestic and foreign policymaking of the United States, including the United States relationship with Taiwan.'

China is currently the U.S.'s largest creditor, holding 10% of the $8.577 trillion in publicly held debt, according to the Treasury Department.

'It's the worst kept secret in the world that our deficit spending is being financed by foreign investors who may not always have our nation's best interests at heart,' said Sen. John Cornyn, the Texas Republican who sponsored the amendment.

The amendment was approved by voice vote.

Republicans and a growing number of Democrats in Congress have been raising alarms about the nation's spending binge. Just last month, several fiscally conservative Democrats in the House forced party leaders to pare back a major economic bill, amid concern about the impact of the legislation on the budget deficit.

The national debt passed $13 trillion last week, while the deficit for the current fiscal year, which ends Sept. 30, is on track to reach $1.5 trillion.

Among other things, the amendment would require the administration report quarterly to Congress on foreign holdings of U.S. debt, and to make assessments of the risks posed by those holdings. The Government Accountability Office, the investigative arm of Congress, would also be directed to report annually on those risks.

If the administration deemed the economic risks had reached an 'unacceptable level,' the president would be required to lay out for Congress a plan to bring the debt under control, including a timetable.

After China, Japan is the next biggest U.S. creditor.

Corey Boles / Greg Hitt