During a trip to Puerto Rico, U.S. Treasury Secretary Jack Lew is meeting with government officials to explore options to tackle the island's debt crisis. Wednesday he repeated his previous call for congressional action.
At a press conference in San Juan, Lew said that the U.S. territory is already defaulting on loans and is juggling funds between multiple creditors. The government has even stopped some debt payments while residents are bearing the brunt brought about by the financial situation.
"As predicted, creditors are filing lawsuits. Liquidity at the Government Development Bank, which provides essential banking and fiscal services to the central government, is low," he said. "Tax refunds are being withheld and assets in the pension system have been sold to pay out pension bills."
Lew met with Puerto Rico Gov. Alejandro García Padilla and his economic policy team to evaluate how current methods are affecting the $70 billion debt. The Treasury promised technical expertise as it worked with island officials.
"The Puerto Rican government recently took an important step by releasing an updated fiscal and economic growth plan," Lew said.
The Treasury Secretary said that if Congress does allow the island to restructure its debt, it should come with independent fiscal oversight while respecting Puerto Rico's "self-governance."
While Puerto Rico's government is making steps to balance the budget, Lew said no administrative authority without the Congress' help will solve the island's financial problems.
"House Speaker Paul Ryan has committed to producing a responsible solution for Puerto Rico before the end of March," he said. "In order to assist the 3.5 million Americans who call this island home, Congress must pass legislation for the president to sign into law without delay."
Lew is also meeting with Resident Commissioner Pedro Pierluisi, as well as legislators, labor and community leaders and Puerto Rico's business community.