House Democrats are stepping up pressure on Republicans to advance legislation addressing Puerto Rico’s worsening debt crisis by issuing a report arguing that austerity cuts can’t be sustained and have made the island more vulnerable to the mosquito-borne Zika virus, Bloomberg News reported yesterday. Health care cuts in response to the $70 billion debt crisis have created a potentially “disastrous” outcome for residents and show how further sharp reductions in government spending can’t be a part of a legislative solution, according to the report released yesterday by Democrats on the House Natural Resources Committee. Puerto Rico has been particularly hard hit by the virus, and the rainy season that started last month is creating a breeding ground for mosquitoes — and more health-care demands. The disease can result in birth defects and miscarriages. The Obama administration is calling for urgent action after Puerto Rico didn’t make most of a $422 million debt payment on Monday, the biggest default so far in the U.S. territory’s intensifying debt crunch. Bigger problems are just around the corner. Congress has a handful of weeks to hammer out a legislative fix ahead of a second default on a $2 billion debt payment due on July 1. Read more.
What are the next steps for Puerto Rico to resolve its financial distress? A panel of experts at ABI’s New York City Bankruptcy Conference on May 12 will examine potential remedies. Rates go up on Friday! Click here to register.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
