White House will not forgive Puerto Rico's debts as promised

White House officials are refuting President Trump's assertion earlier this week that the White House will forgive Puerto Rico's debts as a way to help it recover from the hurricane. The officials insist that the debts still stand and that Puerto Rico will still have to resolve them.
By Joyce Clark | Oct 06, 2017
President Trump's own administration said to ignore what Trump said earlier this week about forgiving Puerto Rico's debt. Puerto Rico's debt obligations still stand, and so does the repayment plan that was in place pre-hurricane, White House Press Secretary Sarah Huckabee Sanders said Thursday.

"There's a process for how to deal with Puerto Rico's debt, and it will have to go through that process to have a lasting recovery and growth," she said. She explained that the board of advisers formed under the Obama administration to manage Puerto Rico's debt repayments will continue working with the island's government to resolve them.

Sanders was refuting a debt-forgiveness promise that Trump made Tuesday in an interview with Fox News. Trump told the interviewer that creditors who hold Puerto Rican debts will have to "wave goodbye" to it because the government will forgive the debts as a way to help the island recover after the hurricane. Puerto Rico's bond market reportedly plunged following these words.

Sanders wasn't the only White House official to counter Trump on the debts. Mick Mulvaney, Office of Management and Budget director, told CNN Wednesday that Trump should not be taken "word for word" and told Bloomberg News that "we are not going to pay off those debts."

Puerto Rico is saddled with $123 billion of debts and filed for bankruptcy in May to try to reduce them. The amount includes $74 billion that it owes to bondholders and $49 billion in pension benefits that it owes to current and former government employees. In 2016, Congress established a debt-oversight board and assigned it the job of controlling Puerto Rico's budget and debts.

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