For those who haven’t been paying attention, Puerto Rico is in serious financial trouble. It has accumulated more than $70 billion of debt, driven by reckless spending and short-sighted borrowing, that has left the commonwealth’s public corporations and utilities virtually insolvent. To make matters worse, the Puerto Rican government has engaged in a pattern of obfuscation, refusing to release audited financial statements and recently issuing dire new fiscal projections timed to come out just ahead of Treasury Secretary Jacob Lew’s recent visit to the island.

Most of the island’s debt was issued by the provincial government per se but rather by the various public corporations, municipalities and the island’s public power utility, but about 25 percent is debt issued by the government of Puerto Rico. Puerto Rico’s constitution explicitly guarantees debt issued by the commonwealth. Currently, each state can reorganize its non-general-obligation debt via Chapter 9 of the bankruptcy code, and some have suggested that the federal government merely extend Chapter 9 to Puerto Rico as well. Secretary Lew, along with Puerto Rico’s governor, Alejandro Garcia Padillo, want Congress to go one step further and give the island a “super chapter 9” that would allow it to reorganize and jettison some of its general obligation debt as well.