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Puerto Rico debt catastrophe looms

Christian Science Monitor

“That deadline is imminent, but Republicans in the House and Democrats in the administration are still haggling over the terms of a bill to rescue Puerto Rico,” writes The New York Times. “Missing the payment risks further destabilizing its shrunken economy. And there are concerns that the passage of any legislation could be delayed until the island nears the tipping point of its debt woes: a $2-billion debt payment due on July 1.”

Before Congress left Washington Friday for a weeklong recess, legislators were deadlocked over any plan that could be seen as similar to bailout bills of the 2008 financial crisis. Rep. Rob Bishop (R-Utah) is leading a draft of a tentative rescue plan in the House, but it has faced opposition from legislators in both parties who see the bill as nothing more than a bailout.

“For me, I think to any human being, ‘bailout’ means you’re going to get money to solve your problem,” said Representative Bishop. But the bill would “give Puerto Rico access to a court-enforced debt restructuring in exchange for the imposition of a federal fiscal oversight board,” so the island would get no direct money out of the deal. “So to say it’s a bailout, it’s obviously not just a stretch of the meaning of the word, there has to [be] an ulterior motive.”

Puerto Rico’s Governor Alejandro Garcia Padilla is frustrated with Washington’s inaction because he has warned about a default on Sunday’s deadline for months. And while Washington may be at a standstill, the financial crisis has everyday implications for the 3.47 million people who call Puerto Rico home.

The island’s unemployment rate was 11.8 percent in March, more than twice the overall US rate of five percent. Tens of thousands of government workers have been laid off since 2009 to cut costs and 10 percent of the island’s schools have been closed since 2014.

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Doomberg

Written by Doomberg

I am Doomberg, one of the original founding members of Sparta Report, and have been here since the beginning. I am an insatiable news junkie and enjoy reading and writing about the US territories, the Caribbean, video games, smartphones, and of course conservative politics in general.

I also really like pictures of gas stations and claim full responsibility for the silly gas station motif. I'm presently trapped behind enemy lines in a blue state with no hope of escape! The ride never ends.

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