U.S. Congress urged to act before Puerto Rico faces humanitarian crisis

The Obama administration urged Congress on Thursday to push through new laws, warning that Puerto Rico’s economic woes could quickly turn into a humanitarian crisis unless they adopt a blueprint for dealing with the island’s crushing debt burden. The US territory’s governor and a top official from the US Treasury Department said Congress should act on proposals that would allow for a debt restructuring. The plan would also impose new oversight on the island’s finances, expand Medicaid benefits and allow residents to qualify for the same low-income tax credits that are offered to other Americans.The administration’s proposal faces an uncertain future in a Republican-controlled Congress that wants to rein in spending.

In the very near future, Puerto Rico will face impossible choices among providing essential public services, delivering promised pension benefits and paying its debt.

Antonio Weiss, a Treasury Department official who is the administration’s point person on Puerto Rico.

Advisers for several Puerto Rico bondholder groups are scheduled to meet on Tuesday with advisers for the U.S. Territory to discuss the restructuring, after key talks with one of the groups collapsed. Puerto Rico has been urging its many bondholder groups to accept debt restructuring deals. The U.S. Territory said in the summer that it could not repay its debt and in August defaulted for the first time. It since said it would try and restructure $18 billion of debt due over the next five years.

This is a human tragedy, and Wall Street should not be believing that they can get blood from a stone.

Democratic presidential candidate Bernie Sanders

Puerto Rico debt Americas