The White House argued Wednesday that Puerto Rico’s financial crisis is exacerbated by its inability to pressure lawmakers to help the island’s residents, while Wall Street, which holds most its debt, has plenty of advocates worried about their bottom lines.
Puerto Rico’s 3.5 million residents don’t have “a clear constituency to apply pressure to members of Congress to make sure that they’re doing the right thing,” spokesman Josh Earnest said about sticking points between Democrats and Republicans on legislation to help the U.S. territory restructure its debt and improve its governance.
“But yet when you consider the bondholders who are holding this debt, these are almost by definition rich and powerful people who have a clear financial interest in getting a deal that reflects their financial interests,” Earnest said. “And overcoming that dynamic is something that will be challenging for Congress to do; and it will only be successful if we do work in bipartisan fashion to get it done.”
Nonetheless, Earnest said the White House is working with congressional Republicans to iron out their differences.
“I will say that we are gratified that Congress has continued to make some progress,” he said. “[W]e’ve seen good-faith actors on both sides of the aisle … to find common ground that would offer the kind of debt restructuring authority to the Puerto Rican government that we know that they need,” Earnest said.
Earnest said the Obama administration objects to policy riders in the House bill.
“We are also concerned that there are some unnecessary provisions in the bill that relate to things like federal lands and worker protections that would only worsen” the island’s economic problems, “particularly when you consider that they have already suffered through a decade-long recession,” Earnest said. “It seems like the inclusion of those unnecessary provisions are well, unnecessary.”
