During comments this morning in San Juan, Purto Rico, US Treasury Secretary Jack Lew said:
I am here in Puerto Rico today because the Commonwealth is in the midst of a deepening economic crisis that requires action now.Lew is correct, Puerto Rico is a basket case. Restructuring Puerto Rican debt is a necessity, that is, the government should be allowed to file for bankruptcy immediately.
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. 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.
Puerto Rico is already in default. It is shifting funds from one creditor to pay another and has stopped payment altogether on several of its debts....
The Obama Administration will continue to bring our full capabilities to bear to assist Puerto Rico. The Treasury Department, together with the White House National Economic Council, is leading an Administration effort to ensure the timely disbursement of federal funds and to explore all administrative authorities. And a dedicated team at Treasury is providing technical assistance to Puerto Rico’s economic team on a daily basis.
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.
That’s why, in October, the Administration submitted a proposal to Congress that would establish an orderly process for Puerto Rico to restructure its debts...