In June 2015, Puerto Rico’s governor announced that the government’s debt was not payable. Without congressional action to allow Puerto Rico (P.R.) a legal vehicle for filing bankruptcy and restructuring its $72 billion debt, it will have to default on its obligations. Since then, the Obama Administration has published a Roadmap for Congressional Action to address the Island’s economic and fiscal crisis, two related cases have been presented to the Supreme Court of the United States, and more than 20 related bills have been introduced to Congress by sponsors from both sides of the aisle. However, a year after the governor’s announcement, Washington has not taken significant action to support Puerto Rico’s recovery.
Discussions in Washington continue to focus on creating a fiscal board rather than on the underlying structural causes of the crisis. While P.R. politicians can and should be held responsible for the emission of government debt, there is consensus that a fiscal watchdog alone won’t solve the problem. One of the principal, and often unnamed, causes of the P.R. fiscal crisis is a federal policy which provides unequal treatment to the territories for Medicaid funding.
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