Obama Administration Drafts Bankruptcy Protection Plan for Puerto Rico
October 22, 2015 By Staff
Top Story — The Obama administration on Wednesday proposed a series of measures to assist Puerto Rico in restructuring its $72 billion in debt. The proposal will grant Puerto Rico and other U.S. territories a means of declaring bankruptcy, which they are currently barred from doing.
The announcement by the Obama administration came on the same day that talks broke down between creditors and Puerto Rico’s Government Development Bank after the creditors did not agree to accept reduced bond repayments. Gov. Alejandro García Padilla described Puerto Rico’s debt crisis as a “death spiral” in June, and said that the $72 billion in debts were not payable.
The U.S. Treasury-backed plan includes the creation of an independent body to oversee the U.S. commonwealth’s finances, and will write a new chapter of bankruptcy code specifically designed for U.S. territories. The proposal will also expand Medicaid coverage and extend income tax credits for Puerto Ricans, bringing those programs into line with what mainland residents already receive.
The majority of the plan will need to be approved by the Republican-led Congress, which has recently opposed any form of debt relief to the struggling U.S. commonwealth.
García largely welcomed the proposed measures in a statement, saying that “they have the support of my administration.” With regards to the proposed financial oversight board, Padilla said that it would need to respect Puerto Rican autonomy and comply with “the democratic principles of our relationship with the United States.”
Headlines from the Western Hemisphere
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- The Obama administration is expected to oppose a U.N. resolution that criticizes — for the 23rd straight year — the U.S. economic embargo on Cuba, despite the thaw in diplomatic relations between the two countries.
- A U.S. Customs and Border Patrol agent shot and killed a Mexican man who allegedly wielded a knife as he attempted to cross the U.S.-Mexico border in Calexico, California.
- The Cuban government launched an initiative Wednesday that aims to protect sharks around its shores by implementing new regulations on fishermen, a plan devised in conjunction with the U.S.-based Environmental Defense Fund.
- In a Wednesday address on state television, Haiti’s prime minister and several other top officials assured voters that they would keep their promise and maintain ordered, fair and peaceful elections in the country this coming weekend.
- Guatemala’s anti-corruption protest movement and calls to boycott presidential elections have lost momentum, according to a piece in The Christian Science Monitor, after massive demonstrations that lead to the ousting of former President Otto Pérez Molina in September.
- Meanwhile, The Guardian explores what is says is “Latin America’s enduring fondness for grotesque racist caricatures,” an issue that has been brought to the foreground by the heavy favorite in Guatemala’s presidential race, former comedian Jimmy Morales, whose former blackface character is still used in hair and soap product advertisements in the country.
- A new cargo ferry between El Salvador and Costa Rica will begin operations in January, with the aim of lowering transportation costs, reducing traffic at the Costa Rica-Nicaragua border and helping truckers avoid security threats they encounter on their route between the two countries.
- Bolivian President Evo Morales became Bolivia’s longest-serving leader at nine years, eight months and 27 days on Wednesday, a milestone celebrated during a religious ceremony at pre-Incan religious site Tiwanaku. A referendum in 2016 will determine whether Morales can run for another five-year term after his current one ends in 2020.
- Venezuelan President Nicolás Maduro and members of his United Socialist Party have accused a prominent businessman and a Harvard economist of conspiring to destabilize the country’s socialist government after the two were secretly recorded discussing the need for an International Monetary Fund intervention to rescue the recession-hit country.
- U.S. authorities are carrying out investigations in multiple U.S. jurisdictions to determine whether Venezuelan officials used state-run oil company PdVSA for a series of kickback schemes that could have cost the South American country billions of dollars, The Wall Street Journal reports.
- Three Brazilian lawyers on Wednesday filed what is considered to be the most significant attempt to date to initiate impeachment proceedings against President Dilma Rousseff. The request will be reviewed and potentially accepted by lower house speaker Eduardo Cunha, one of Rousseff’s most vociferous antagonists, who is himself the target of a major corruption probe.
- A new civil union law goes into effect today in Chile that gives greater rights to unmarried co-inhabiting couples, including the ability to make medical decisions and own property together.
- The social programs established by Argentine President Cristina Fernández affect 35 percent of the population, which may explain why the president’s chosen successor Daniel Scioli is expected to win Sunday’s election despite the country’s sagging economy and rising inflation, according to The Associated Press.