As a Puerto Rico agency veers toward a default as soon as Aug. 1, federal officials have echoed a refrain heard during recent state and local fiscal crises: Fix the problem on your own, Bloomberg reported today. President Barack Obama’s administration and the Federal Reserve have said it’s up to Congress to decide how to assist the island as it struggles with $72 billion of debt. Yet on Capitol Hill, Puerto Rico’s push to allow some agencies to file for bankruptcy has stalled. Efforts to find a Republican to co-sponsor the legislation haven’t borne fruit. Puerto Rico has been moving toward the largest restructuring ever in the $3.6 trillion municipal-bond market since last month, when Gov. Alejandro Garcia Padilla said that the commonwealth can’t afford to pay its debts. The securities have tumbled amid speculation over how much investors stand to lose as his administration moves to draw up a restructuring proposal by Sept. 1.
