Treasury Persuades Congress but Faces Challenges in Aiding Puerto Rico

by San Antonio Attorney

U.S. lawmakers are currently under fire from the Obama administration when it came to help Puerto Rico out of its debt crisis. However, this is also likely to face refusal from the Congress, which is controlled entirely by the Republican Party.

Puerto is already moving closer to bankruptcy and can be illiquid by November, according to CNN News. The government is trying their best to pull up the sinking economy.

The U.S. Treasury released a list of proposals for the Congress to go over in helping Puerto Rico. These consist of healthcare funding measures and bankruptcy legislations, according to a statement last Wednesday.

However, treasury is limited in what it can do without the full support of two parties. Puerto Rico, struggling with $72 billion debt, is unlikely to get support.

Puerto Rico is a Caribbean island that lures investors with tax-exempt bonds. But Puerto Rico is also suffering from its debt burden as 45 percent of its citizens live in poverty. The bondholders are refusing proposals to reduce the principal and interest on their debt holdings.

The territory predicted that it will run out of cash by next June.

U.S. Treasury Secretary Jack Lew and counselor Antonio Weiss collaborated with interest groups on Monday. Weiss will make a testimony in a court hearing on Puerto Rico before the U.S. Senate Committee on Energy and Natural Resources.
From the country dwindling financial crisis, there is still a little headway. A bill extending bankruptcy protections to Puerto Rico provides the option of filing under Chapter 9 of the bankruptcy code.

Most critics emphasized that Puerto Rico receives far less in federal Medicaid funding than it would. They also verbalized that it deserves to be on an equal footing. Treasury’s proposal calls for legislation to seal the deal.

Leave a Comment

Previous post:

Next post: