Puerto Rico Bankruptcy Would Be Bad Idea, Senator Grassley Saysby
A key Republican U.S. senator said giving Puerto Rico the power to file for bankruptcy protection to escape from its debts is a “bad idea” that won’t address the causes of the commonwealth’s long-brewing fiscal crisis.
Senator Charles Grassley, the chairman of the Judiciary Committee, said at a hearing of the panel Tuesday that bankruptcy should be a last ditch measure, not an initial response.
“This is an idea that should be at the end of the line, not the front of the line,” Grassley said.
Puerto Rico is struggling with $70 billion of debt that Governor Alejandro Garcia Padilla says the island can’t afford to repay.
Island officials and Democratic lawmakers have pushed to give some Puerto Rico agencies the power to file for bankruptcy, which would allow the government to escape from some of what it owes. Bondholders have lobbied against the proposed law, saying they bought the bonds with the assurance that bankruptcy wasn’t an option. The legislation has failed to advance in Congress for lack of Republican support.