DEBTOR THINK AGAIN
Don’s ‘wipe out’ PR loans a bit off: aide
White House Budget Director Mick Mulvaney on Wednesday walked back President Trump’s comment to “wipe out” Puerto Rico’s billions of dollars in debt in the aftermath of the hurricane that has devastated the US territory.
“I would not take it word for word,” Mulvaney told CNN. “We are not going to deal with the fundamental difficulties Puerto Rico had before the storm.”
In an interview with Bloomberg News, Mulvaney said it’s up to Puerto Rico to pay off its debt.
“I think what you heard the president say is that Puerto Rico is going to have to figure out a way to solve its debt problem,” he said. “We are not going to bail them out. We are not going to pay off those debts. We are not going to bail out those bondholders.”
After surveying damage in hurricane-ravaged Puerto Rico on Tuesday, Trump said in an interview on Fox News’ “Hannity” that the island owes money to “Wall Street” and “we’re going to have to wipe that out.”
“They had $72 billion in debt before the hurricanes hit and they had a power plant that didn’t work before the hurricane so we’re going to help them, we’re going do something and we’re going to get it back on its feet,” the president said. “You can say goodbye to that.”
After Trump’s comments, Puerto Rico’s general-obligation bonds due in 2035, which have been falling since Hurricane Maria made landfall two weeks ago, fell to 32 cents on the dollar.
Puerto Rico is already restruc- turing its debt through a bill Congress passed last summer known as “PROMESA” — promise in Spanish.
Mulvaney referenced PROMESA — the Puerto Rico Oversight, Management, and Economic Stability Act — during the CNN interview and said that process would continue.
“So those bonds are being dealt with, were being dealt with before the storm, will be dealt with after the storm through the PROMESA process,” he told CNN.
Earlier Wednesday, Trump lashed out on Twitter over the “fake news” coverage of his trip.
“Wow, so many Fake News stories today. No matter what I do or say, they will not write or speak truth. The Fake News Media is out of control!” he wrote.
Trump was criticized when he told Puerto Rican officials they were lucky the island wasn’t hit with a Katrina-like catastrophe because it would have caused even more death and destruction and joked how expensive relief efforts were becoming, saying, “You are throwing our budget out of whack.”