Democratic presidential candidate and former Maryland Gov. Martin O’Malley wants the U.S. to step in and bail out Puerto Rico.
On Sunday, Gov. Alejandro Garcia Padilla announced that the U.S. territory can’t pay its $72 billion in debt, drawing comparisons to Greece and warnings from economists that U.S. investors have much more to lose from a Puerto Rico collapse than the fall of Athens. Unlike a U.S. city such as Detroit, Puerto Rico cannot file for bankruptcy per the Constitution.
“As a nation we must help our fellow U.S. citizens not only because it’s the right thing to do, but because our region’s economic stability depends on it,” O’Malley said in a statement today, urging President Obama and Congress to act.
Garcia Padilla has asked “for concerted actions from Washington, in one voice, now — action wherein changes can finally be made to Chapter 9, so that Puerto Rico can count on the same protections as other jurisdictions.”
“Those who attempt to exploit this situation to gain a financial or political advantage” would find that “Puerto Rico will be united against you,” the governor warned creditors.
“While Governor Garcia Padilla has taken the courageous first steps to steer Puerto Rico through this crisis, we must act now to avoid Puerto Rico’s economic collapse,” O’Malley said. “First, Puerto Rico should be able to negotiate with its creditors just as states can under the U.S. Bankruptcy code. Congress should approve Resident Commissioner Pedro Pierluisi’s legislation that would allow for this to happen.”
“Second, as I’ve stated before, the Department of Health and Human Services must end the inequitable treatment of Puerto Rico under Medicare, Medicaid and the Affordable Care Act. High costs and low reimbursement rates are a huge burden to Puerto Rico’s budget and millions of U.S. citizens are at risk of losing care,” he continued.
“These are two steps we can take today, but I urge the Administration and Congress to work with Puerto Rico on a path forward that both provides immediate relief, and builds a foundation for sustainable, long-term economic stability.”
Pierluisi stressed yesterday that the island “does not have access to tools that are available to nations—like IMF or other external funding—just as it does not have access to certain tools—like Chapter 9 for its municipalities—that are available to all U.S. states.”
“Puerto Rico’s political status is thus a major impediment to its economic and fiscal recovery,” he said, adding of his legislation to seek an exemption from the Jones Act that “to say this legislation faces political headwinds in Washington is a serious understatement.”
“I filed a bill to achieve this objective in July 2014, and then again in February 2015, and am working hard to move it forward in the legislative process.”