SAN JUAN – U.S. Treasury Secretary Jack Lew said during a visit to Puerto Rico on Wednesday that Congress must act without delay to resolve the island’s escalating economic and fiscal crisis.
As part of a trip he described as symbolic, Lew met in San Juan with Gov. Alejandro Garcia Padilla, representatives of Puerto Rico’s business community and labor and community leaders.
“I am here in Puerto Rico today because the (U.S. commonwealth) is in the midst of a deepening economic crisis that requires action now,” Lew said at a press conference, reiterating his call for congressional Republicans to pass debt-restructuring legislation for the island.
In a proposal unveiled in October, the Obama administration urged Congress to “move swiftly to pass pending legislation that provides Chapter 9 protection to Puerto Rican municipalities,” as well as authorize a broader framework that would allow for a “comprehensive restructuring of Puerto Rico’s debts.”
The “Roadmap for Congressional Action” furthermore called on lawmakers to provide independent fiscal oversight while respecting Puerto Rico’s system of self-governance.
The U.S. commonwealth, which has been in a recession for nearly a decade and experienced a large increase in migration to the mainland United States in recent years, is burdened by a hefty $72 billion public debt load that Garcia Padilla says is unpayable.
“This crisis is already imposing real hardship on the people of Puerto Rico in terms of basic healthcare, legal and education services, and significant unemployment,” Lew said.
“And that hardship will only get more intense as the fiscal situation deteriorates. The population is shrinking as 3,000 Puerto Ricans leave the island every week in search of better opportunities on the mainland.”
Although Puerto Rico made most of a series of bond payments due at the beginning of the year, Lew said the U.S. commonwealth was “already in default.”
“It is shifting funds from one creditor to pay another and has stopped payment altogether on several of its debts. As predicted, creditors are filing lawsuits. Liquidity at the Government Development Bank, which provides essential banking and fiscal services to the central government, is low,” the secretary added.
He pledged that the Obama administration would do its utmost to provide Garcia Padilla’s government with assistance.
“But the fact is that no administrative authority can put an end to this emergency. Only Congress can enact the legislative measures necessary for Puerto Rico to resolve this problem,” Lew said.