Former Governor Luis Fortuño spoke with Fox Business on how Puerto Rico might be able to come up with a plan to cope with the $73 billion in debt facing the territory.
Both Jeb Bush and Hillary Clinton have spoken in favor of giving Puerto Rico access to Chapter 9 bankruptcy. This would not let Puerto Rico take bankruptcy as a territory, but would allow bankruptcy for “municipalities” — things like cities and utilities like the energy agency PREPA.
Fortuño felt that Governor Garcia Padilla’s announcement that the territory wouldn’t be able to pay its debts might make it harder to get Chapter 9 coverage for Puerto Rico. But he also pointed out that the situation is more complicated than many people understand.
“There are 17 different kinds of credit,” said the governor, pointing out that some kinds of debts have protection under Puerto Rico’s constitution and some do not. Fortuño also favors extending Chapter 9 to Puerto Rico. “It makes sense that we treat creditors and debtors in the same way across the country; that includes not just states but territories as well.”
Fox Business suggested that Americans are saying “No bailouts.” The White House also has said that there would be no bailouts for Puerto Rico, but that federal experts are helping Puerto Rico find all the resources possible.
“I don’t see a need for bailouts,” agreed Fortuño.
Asked why the government of Puerto Rico didn’t reduce expenses by letting government workers go, Gov. Fortuño joked about his own experience as governor.
“During my tenure,” said Fortuño, “I slashed expenses by 20%… and I’m back to my law practice as a result of that.”