It’s up to Congress to help Puerto Rico restructure its debt before that option is no longer available and costs to taxpayers rise significantly, White House spokesman Josh Earnest warned on Monday.
Puerto Rico did not make $422 million in debt payments Monday, marking its first default in its current financial crisis.
“I sure hope it creates a new sense of urgency for members of Congress to address this situation,” Earnest said in response to the default.
The White House proposed a mechanism that would allow Puerto Rico to restructure its crushing debt 194 days ago, Earnest noted, but Congress did not pass anything before adjourning for a week-long recess.
Earnest stressed that the White House proposal is not a bailout, but argued that Republican inaction could necessitate one.
“The situation gets worse by the day” and “only makes a bailout more likely, which is why [we] continue to press hard for Republicans in Congress to stop dragging their feet and to address a situation that’s having a negative impact on more than three million Americans who live in Puerto Rico,” Earnest said.
The administration “is seeking to empower the Puerto Rican government with the kind of restructuring authority that cities all across the country have,” Earnest said.
He also said it would be hard to argue that Puerto Rican officials should have slashed services to make the bond payments, and said he doesn’t think there are “any good options for the Puerto Rican government at this point.”
