Congressional action urged on Puerto Rico’s $70B debt crisis
NEW YORK — Treasury Secretary Jack Lew on Tuesday said Puerto Rico’s financial crisis risks turning the commonwealth into a chaotic mess unless Congress can enact a plan to restructure its debt.
“The challenge is for Congress to act fast enough so that the unfolding crisis in Puerto Rico doesn’t cascade out of control,” Lew said during an on-stage interview at the annual Milken Institute conference in Los Angeles.
The island faces $70 billion in debt overall, a staggering 45 percent poverty rate and a shrinking population. It owes $1.9 billion more on July 1 that Gov. Alejandro Garcia Padilla says it cannot pay.
On Monday, the Government Development Bank defaulted on a $422 million debt payment while it agreed to a tentative restructuring framework with some large creditors who promised to hold back from taking legal action for 30 days.
Legislation to help Puerto Rico deal with its $72 billion debt crisis “is being finalized” by a Congress committee following negotiations with the Treasury Department, House Speaker Paul Ryan’s office said.
The House Natural Resources Committee has been struggling to write a bill restructuring Puerto Rico’s debt.