“Elizabeth Warren had a message for the Obama administration today: Be as creative in finding a solution for the 3.5 million American citizens in Puerto Rico as you were in protecting bank profits after the 2008 crisis.
“The issue arose in a Senate Energy and Natural Resources Committee hearing on Thursday morning about the island commonwealth, which owes $73 billion in debt it cannot repay. A large chunk of the debt is owned by so-called “vulture funds” that picked it up at a discount. The creditors want Puerto Rico to find the funds to pay them off by drastically cutting services and selling assets, guaranteeing continued economic recession for the island’s inhabitants.
“Late Wednesday, the Obama administration released a “Roadmap for Congressional Action” to deal with the debt crisis. It included allowing Puerto Rico to obtain bankruptcy protection, which is currently barred by U.S. law. But the report adamantly stated that, while administration officials are working closely with the Puerto Rican government, “there is no set of administrative authorities that can fully address and resolve this crisis… only Congress can provide the critical tools Puerto Rico needs to restructure its debt.”
Read the full “The Fiscal Times” column by David Dayen here.