The effort to relieve, or bail out, the U.S. commonwealth of Puerto Rico from its current economic struggles has just received a big boost from the Obama administration.
U.S. Treasury Secretary Jacob Lew has said that allowing Puerto Rico the opportunity to file for bankruptcy will, in fact, help the island get out from under the $72 billion in public debt that has buried it. Lew said:
A central element of any federal response should include a tested legal bankruptcy regime that enables Puerto Rico to manage its financial challenges in an orderly way.
Puerto Rico is entering its ninth year in recession, and the administration of Gov. Alejandro García Padilla has been pushing for the right of its public agencies to file for bankruptcy under Chapter 9, but the proposal has not drawn any Republican co-sponsors. Leading House Republicans have said they worry that allowing such access would not solve Puerto Rico’s financial difficulties, and Garcia traveled to the U.S. to meet with legislators and Lew on the issue.
Pedro Pierluisi, the island’s representative in Congress, praised Lew’s letter.
“I will continue to do everything in my power, working with my allies on both sides of the aisle, to move this legislation forward in Congress on an expeditious timeline,” he said.
GOP presidential candidate Jeb Bush has also recently said that he would support Puerto Rico filing for bankruptcy.