The U.S. Department of the Treasury's Analysis of the Situation in Puerto Rico

The Commonwealth of Puerto Rico is in the midst of an economic and fiscal crisis, facing more than a $70 billion debt, and already defaulting on payments in the amount of $174 million. In turn, Puerto Rico may be on the cusp of a humanitarian dilemma - as it is forced to choose between providing public services, delivering pension benefits, or paying its debt. These critical issues have become a focal point for the Committee on Natural Resources ("Committee"), which has held two subcommittee oversight hearings over the past several weeks addressing different facets of the fiscal situation in Puerto Rico. Both hearings, and their associated witnesses, have resulted in calls to the Committee on the need for a legislative solution to the Puerto Rican fiscal situation, and what must be included in such legislation. Echoing these calls, the Administration through the U.S. Department of the Treasury (Treasury) has forwarded to Congress a legislative plan to address the debt crisis. Treasury's plan involves four "interrelated elements" that the Administration believes are necessary to address "Puerto Rico's fiscal crisis and restore economic growth." The four are summarized as follows: 1) access to debt restructuring, 2) implementation of strong independent oversight to improve Puerto Rico's fiscal governance, 3) "adequate" treatment to Medicaid benefits, and 4) promotion of economic measures aimed at promoting growth.