Obama administration is sending $1 billion in aid to Puerto Rico
The Obama administration on Monday sent a $1.9 billion loan to Puerto Rican authorities to help finance a $73 billion overhaul of the island’s crumbling financial system.
The loan, which President Obama called the “first of its kind” to help the island recover from a financial crisis that has left more than 3 million people without jobs and has prompted the U.S. territory to default on debts totaling more than $60 billion.
The loans are part of a broader package of relief the administration announced Monday to help stabilize the island as it faces a $70 billion debt crisis.
Puerto Rico is struggling to pay off $70.6 billion of debt and is seeking a $3 billion federal bailout.
Puerto Rican lawmakers are negotiating with the island government over whether to approve the deal, but Obama on Monday signed it.
Puerto Ricans were hit particularly hard during the financial crisis and are now grappling with a $16.8 billion bailout package approved by Congress earlier this month.
Puerto Island Gov.
Ricardo Rosselló, who has said he would not consider a bailout if Puerto Rico didn’t get its debt under control, said in a statement the president’s decision to support the deal was “a significant step toward the full recovery of Puerto Rico.”
He said the government would continue to work to get Puerto Rico to the table and said he was committed to working with Congress.
“Today’s decision marks a significant step in that direction,” Rossello said.
Puerto Rico’s government also received a $5.8 million loan from the U-S Bank International, which will cover the cost of repaying some of its debts.
The U-Banks decision comes just days after a U.N. report warned Puerto Rico was at risk of a financial meltdown.
S., U.K. and European Union officials also criticized the island for the lack of progress in making financial reform.
Puerto Islacano, which was the only U.I. territory in the U;s Caribbean, was hit particularly badly during the crisis and is now grappling a $15.4 billion bailout proposal.
The island has been struggling with a huge debt burden and a $23.7 billion deficit.
President Obama said Monday that he was not aware of any specific funding request from Congress for Puerto Rico but that the administration was sending money to help with the relief efforts.
The White House said that the $1bn loan, announced in a letter to Puerto Ricos governor, would be used to help pay down the debt, which has grown to more than a trillion dollars.
Puerto Cielo Gov.
Pedro Rossellu announced the $2.6bn loan Monday in a tweet, saying the administration would “help make Puerto Rico the economic powerhouse it was meant to be.”