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Treasury Secretary Jack Lew puts a face on Puerto Rico debt crisis

 
Treasury Secretary Jack Lew, left, and Puerto Rico Gov. Alejandro Garc?a Padilla, center, visit a kindergarten classroom at Eleanor Roosevelt Elementary in San Juan on Monday. “The financial crisis is not just a question of bondholders,” Lew said.
Treasury Secretary Jack Lew, left, and Puerto Rico Gov. Alejandro Garc?a Padilla, center, visit a kindergarten classroom at Eleanor Roosevelt Elementary in San Juan on Monday. “The financial crisis is not just a question of bondholders,” Lew said.
Published May 10, 2016

SAN JUAN, Puerto Rico — As Washington remains deadlocked over a solution to Puerto Rico's rapidly worsening debt crisis, the U.S. Treasury Secretary Jack Lew traveled here Monday to put human faces on the dry numbers underlying the island's woes, seeking to pressure Republicans in Congress to move quickly on a rescue package.

Lew visited a struggling hospital complex and an elementary school, and conferred with local officials and business leaders, all to dramatize the stakes as the island faces both a financial collapse and the spread of the Zika virus.

"The financial crisis is not just a question of bondholders, but it's a question of the lives being led by 31/2 million Americans who live on Puerto Rico," Lew said, standing outside the cafeteria at Eleanor Roosevelt Elementary School, where employees told him of battling termites, equipment failures and electrical outages.

"What Puerto Rico needs is the ability to restructure its debt," the Treasury secretary added. "That means that there needs to be an oversight authority, and the government of Puerto Rico has to work with that new structure to put the island on a path toward a sustainable economic future."

Puerto Rico's governor, Alejandro García Padilla, interjected: "The secretary and the administration have been there with us. We need Congress to act.

"We have not been offered and we are not asking for a bailout," García Padilla said, cognizant that conservative groups in Washington have assailed emerging legislation as just that, though no federal money is involved.

But, he added, "If Congress does not act, then we will need a bailout. And it will be very expensive for U.S. taxpayers."

Last week, Puerto Rico defaulted on most of a $422 million debt payment — its largest missed payment to date — with about $2 billion coming due July 1.

At least 629 cases of Zika infection have been confirmed, and it is projected that up to 20 percent of the population could become infected this year, according to data from the Centers for Disease Control and Prevention. Zika infections have been linked to serious birth defects.