The White House is not considering a financial bailout for Puerto Rico, where chronic fiscal challenges have raised the specter of a Detroit-like bankruptcy, an Obama administration official said yesterday, Reuters reported. The island's woes have led credit rating agencies to say that they are considering labeling the U.S. territory's general obligation debt as junk bonds. Puerto Rico already pays the highest interest rates of any big municipal bond issuer, but as a U.S. territory, it does not have the ability to file for chapter 9 protection. "The President's Task Force continues to partner with the Commonwealth to strengthen Puerto Rico's economic outlook and to ensure that it is taking advantage of all existing federal resources available to the Commonwealth," said White House spokeswoman Katherine Vargas. "There is no deep federal assistance being contemplated at this time," she said. Puerto Rico has raised taxes, reformed pension systems and cut staff in moves meant to counter chronic budget deficits and an economy in or near recession for eight years.
