December, 01 2015, 02:00pm EDT
For Immediate Release
Contact:
Greg Williams, Communications Director
Puerto Rico Avoids Default
Governor Announces Revenue "Claw-Back" to Fund Government Services
WASHINGTON
Puerto Rico surprised some analysts by making a scheduled $354 million debt payment and avoiding a default. In an announcement, the island's Government Development Bank said it had "paid all principle and interest payments due today on certain outstanding [debt]." Puerto Rico Governor Alejandro Garcia Padilla announced at a Senate Judiciary Committee hearing in Washington that the island's government will "claw-back" revenues designated to pay certain debts to instead pay for government services. "We have no cash left," Padilla told the committee. The US Territory owes $72 billion in total debt, which Governor Padilla called "unpayable" in June.
"With how dire the situation is in Puerto Rico, I was surprised the government made the payment," said Eric LeCompte, executive director of Jubilee USA, a religious development group. "The next chapter in this crisis is right around the corner."
In January, Puerto Rico is scheduled to make its next debt payment to the tune of $957 million.
The Senate hearing that Garcia Padilla testified at discussed proposed bankruptcy, health care, tax reforms and a federal control board to monitor Puerto Rico's finances. In its statement, the Government Development Bank called on Congress to grant Puerto Rico access to bankruptcy protection. The Bank said debt relief was necessary to avoid a "humanitarian crisis" on the island. Nearly half of Puerto Rico's population lives in poverty, and 80% of the island's children live in high-poverty areas.
"This crisis affects our citizens and we desperately need a solution that makes the debt sustainable and prevents austerity," noted LeCompte.
Read the Government Development Bank's announcement.
Read a timeline of Puerto Rico's debt crisis.
Jubilee USA Network is an interfaith, non-profit alliance of religious, development and advocacy organizations. We are 75 U.S. institutions and more than 750 faith groups working across the United States and around the globe. We address the structural causes of poverty and inequality in our communities and countries around the world.
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Civil liberties defenders on Thursday decried the U.S. Senate's advancement of the Reforming Intelligence and Securing America Act, which critics say lawmakers are trying to ram through without protection against warrantless surveillance and with a provision that would effectively make every American a spy whether they like it or not.
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