Treasury secretary urges Senate to pass Puerto Rico bill before next debt default

The Guardian

Treasury secretary urges Senate to pass Puerto Rico bill before next debt default

The US Senate must take immediate action to address Puerto Rico’s $70bn debt crisis, Treasury secretary Jack Lew said on Monday, days before the near bankrupt territory looks set to default on its debts once more.

In a letter addressed to Senate leadership, Lew called on Congress to pass a bill addressing the issue before the US territory defaults on a $2bn debt payment this Friday.

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“If legislation doesn’t pass before 1 July, we are opening the door for vulture funds to exploit Puerto Rico,” noted Eric LeCompte, a United Nations debt expert and the executive director of the religious development coalition Jubilee USA. “Up to now we’ve seen very little predatory behavior, but if Puerto Rico defaults without protections, the vultures will swoop in.”

“The legislation provides critical breathing space,” said LeCompte. “Before Puerto Rico’s next default, it needs the protection of this legislation. The bill in front of the Senate allows Puerto Rico to pay pensions and social services before it pays the debt.”

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