It seems the Obama Administration is in the business of printing money. Today it was announced that the President is urging Congress to give the Island of Puerto Rico a handout to help them not go bust before the end of the year. The bankruptcy protection offered to Puerto Rico is of some special type that is not available to the 50 states.
Here’s the report from The Washington Post:
With Puerto Rico buried in debt and on course to completely run out of money by the end of the year, the Obama administration is urging Congress to take unprecedented action to help the island, including granting a type of bankruptcy protection unavailable to the nation’s 50 states.
The administration said the broader bankruptcy protection, which would be available only to territories but not fiscally pressed states, is needed to help Puerto Rico avert a mushrooming crisis and restructure its $73 billion in debt.
The island will soon “face the unenviable and difficult choice between repaying its debts and maintaining vital public services,” the administration said in a statement and 10-page fact sheet released Wednesday evening. “The latest reliable estimates reveal that, without further steps, Puerto Rico will not have the resources to pay for both.”
In addition to urging Congress to offer Puerto Rico the new type of bankruptcy protection, the administration is also recommending that Congress broaden access to the island’s Medicaid program, a move that would pump money into its teetering health-care system. It also wants the island workers to have access to a broader array of federal tax credits, including the earned-income tax credit, in an effort to pump up its dismal 40 percent labor force participation rate.
The most laughable part of this intervention is that Congress is supposed to supervise the territory’s finances to make sure that they are fiscally responsible. As if they know how to do that!
The Washington Post continues:
Finally, the administration said, Congress should install a control board to oversee the island’s finances and ensure that they are being handled in a responsible and transparent manner.
Much self-congratulatory praise was handed out by the Governor of Puerto Rico and other officials, who, let’s face it, are hoping this hail-Mary move to bail out the depressed economy will get passed in the Republican Congress so they don’t have to raise taxes and make the people of Puerto Rico pay for this debacle. Instead, the people of the entire United States are being asked to pay the tab for the island’s mishandling of funds. There was a great deal of talk about the “group effort” that is required to get the Puerto Rican economy under control. Apparently, it takes a village to raise an island.