SAN JUAN, Puerto Rico (AP) — U.S. Treasury Secretary Jacob Lew stressed on Wednesday during a visit to Puerto Rico that congressional action is the only solution to pulling the U.S. territory out of its worsening economic crisis.
He called on Congress to approve a restructuring mechanism to help the island deal with its $72 billion public debt. He also said some kind of oversight authority that respects Puerto Rico's system of self-government is needed.
"Now is the time to act, and I'm here to further that effort," Lew said after meeting with Gov. Alejandro Garcia Padilla. "It would be a mistake for anyone to think there's a plan B that comes anywhere near to being as effective."
His trip comes just days before members of the U.S. House Subcommittee on Insular Affairs are scheduled to discuss creating an authority to oversee Puerto Rico's finances. Republicans have been pushing for a federal fiscal control board similar to one that helped guide the District of Columbia through a fiscal crisis two decades ago. But some Puerto Rico officials have balked at the idea of the federal government having such oversight.
Pedro Pierluisi, Puerto Rico's representative in Congress, said that he expected a legislative package to be unveiled after next week's hearing. However, he stressed that the package has to give Puerto Rico the authority to restructure a portion of its debt and provide it with equal treatment under federal programs.
"Over the years, Congress has a history of trying to provide Puerto Rico with 'special' treatment, and these efforts, whether well-intentioned or ill-intentioned, almost always end up harming Puerto Rico," he said. "My constituents are not laboratory rats upon whom the federal government should be undertaking policy experiments."
Republican U.S. House Speaker Paul Ryan of Wisconsin has promised that Congress would come up with "a responsible solution" for Puerto Rico's debt problems this year. Republican leaders have demanded to see the territory's audited financial statements.
Local officials say they will be available soon, but Gov. Garcia Padilla said the statements will not reveal anything new.
Puerto Rico already has defaulted on several bond payments and warned it does not have the money to make upcoming payments. The local government also faces its first lawsuit over how it diverted funds to meet certain bond payments.
Lew noted that up to 3,000 Puerto Ricans are leaving the island every week for the U.S. mainland because of nearly a decade of economic stagnation and said action is needed soon.
"This is not a case of waiting will help," he said. "All waiting does is make the process more complicated, messier and more costly."
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