Politicians in Washington are working together on a financial plan to rescue Puerto Rico, weeks before they are expected to default on bond payments that would be detrimental to an already shaky economy. The current plan, which is led by House Republicans, will give the island tools that bankruptcy proceedings offer. This will only happen however, if Puerto Rico comes under federal oversight and meets very specific conditions. The oversight will consist of a 5 member voting board, selected by the POTUS. The board will have the power to subpoena documents from both the U.S. and Puerto Rican governments, their main goal being to audit the local government so that they can find savings and determine how to restructure the $72 Billion the country has racked up in debt.
This package comes under the direction of Speaker Ryan, who has been in consultation with the U.S. Treasury Department and other Democratic leaders. The Treasury Department has also been recently calling for Puerto Rico's debt to be restructured. While this legislation is being pushed through Congress, there are still skeptics who think that restructuring should only be allowed in certain areas and where necessary. Speaker Ryan set a March deadline when the rescue package was drafted so it will be interesting to see if Congress can finalize a plan to help Puerto Rico's deteriorating situation.
http://www.nytimes.com/2016/03/25/business/dealbook/plan-to-rescue-puerto-rico-advances-led-by-house-republicans.html?ref=business&_r=0
http://www.nytimes.com/2016/03/25/business/dealbook/plan-to-rescue-puerto-rico-advances-led-by-house-republicans.html?ref=business&_r=0
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ReplyDeleteI have a friend and brother who attends Ohio Wesleyan who was born and raised in Puerto Rico, and have always wondered why the island nation and U.S territory was never made into a state, and this may be a reason why. If it was made into a state, then I believe the debt to the U.S would have to be forgiven, because federal and state laws state that U.S states cannot go bankrupt, something that this article states is only a matter of time.
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