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Gov. García Padilla: I will Answer Hatch’s Letter, but Congress Needs to Have Will to Act

By on February 11, 2016

SAN JUAN – In response to a recent letter sent by a high-ranking Republican senator, demanding detailed information on the island’s fiscal state, Gov. Alejandro García Padilla said Thursday he will answer as soon as possible, but that Congress “needs to have the will to legislate.”

As Republicans in both chambers continue to mull over potential legislation for Puerto Rico’s fiscal and economic issues, the chair of the Senate Finance Committee, Orrin Hatch (R., Utah), sent a letter to the governor Wednesday asking for a host of information to be delivered by March 1.

“It requires a lot of information,” García Padilla told reporters at La Fortaleza, while adding there has never been more information available on the island’s fiscal state than today.  

Hatch’s request covers a wide range of aspects—from the island’s debt, expenditures and audited financials, to Puerto Rico’s underfunded pension systems and even U.S. Treasury’s technical assistance that has been given so far. “Unfortunately, it has been challenging to acquire recent verifiable financial information about Puerto Rico’s financial condition,” the senator wrote.

“I tell Sen. Hatch, and all members of Congress: The only thing that is not transparent here is Republicans’ will to legislate in favor of Puerto Rico. That is the only thing that is not transparent,” countered García Padilla on Thursday, while adding that the only GOP member that has been “emphatic” over the commonwealth issue has been House Speaker Paul Ryan (R., Wis.).

Meanwhile, the governor argued that demands for more financial information “are creditors’ argument over Puerto Rico’s payment capacity. It is simple and it is an excuse.” In fact, García Padilla said that if “taken seriously,” the argument should be in favor of restructuring and congressional action to this effect by granting access to a debt-restructuring regime.

The commonwealth has been seeking congressional action during the first months of the year, particularly over access to a debt-restructuring mechanism, as it tries to avoid additional defaults amid a steeper debt-service schedule this summer.

Puerto Rico Gov. Alejandro García Padilla

Puerto Rico Gov. Alejandro García Padilla

“In a restructuring process, the first thing the debtor—in this case Puerto Rico—has to prove is that he can’t pay. So if there is doubt over Puerto Rico’s payment capacity, while asking for more information, then let’s legislate the [debt-restructuring regime]…. We would have to prove [a judge] that we can’t pay,” García Padilla said.

Ryan has said the lower chamber aims to come up with a solution to the Puerto Rico issue before the end of March. As for the upper chamber, although not committing to a deadline to act on the matter, some GOP senators, including Hatch, have said they are moving forward on several initiatives that deal with Puerto Rico.

Along with two other Republican senators, Hatch presented last year a bill that sought to implement a federal fiscal control board on the island, although without access to a debt-restructuring regime. Instead, the bill proposed to tap Affordable Care Act, or Obamacare, funds to provide short-term liquidity assistance to Puerto Rico.

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