U S Department of Treasury : Remarks by Treasury Secretary Jacob J. Lew During a Press Availability in Puerto Rico

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SAN JUAN, PR - Good morning. I am here in Puerto Rico today because the Commonwealth is in the midst of a deepening economic crisis that requires action now.

This crisis is already imposing real hardship on the people of Puerto Rico in terms of basic healthcare, legal and education services, and significant unemployment. And that hardship will only get more intense as the fiscal situation deteriorates. The population is shrinking as 3,000 Puerto Ricans leave the Island every week in search of better opportunities on the mainland.

Puerto Rico is already in default. It is shifting funds from one creditor to pay another and has stopped payment altogether on several of its debts. As predicted, creditors are filing lawsuits. Liquidity at the Government Development Bank, which provides essential banking and fiscal services to the central government, is low. Tax refunds are being withheld and assets in the pension system have been sold to pay out pension bills.

The Obama Administration will continue to bring our full capabilities to bear to assist Puerto Rico. The Treasury Department, together with the White House National Economic Council, is leading an Administration effort to ensure the timely disbursement of federal funds and to explore all administrative authorities. And a dedicated team at Treasury is providing technical assistance to Puerto Rico's economic team on a daily basis.

But the fact is that no administrative authority can put an end to this emergency. Only Congress can enact the legislative measures necessary for Puerto Rico to resolve this problem.

That's why, in October, the Administration submitted a proposal to Congress that would establish an orderly process for Puerto Rico to restructure its debts, paired with independent fiscal oversight that respects Puerto Rico's self-governance. In addition, we proposed initiatives that improve health care policies and provide incentives for employment to help solve Puerto Rico's longer-term challenges. A broad array of business, labor, and community leaders - in Puerto Rico and across the nation - strongly support this comprehensive package.

House Speaker Paul Ryan has committed to producing a responsible solution for Puerto Rico before the end of March. In order to assist the 3.5 million Americans who call this island home, Congress must pass legislation for the President to sign into law without delay.

This morning I met with Governor Padilla and his economic team and received an update on the urgent economic situation. The Puerto Rican government recently took an important step by releasing an updated fiscal and economic growth plan. This report underscores the depth of the current crisis and the need for congressional action.

I will also meet today with Resident Commissioner Pierluisi, leadership from Puerto Rico's legislature; labor and community leaders; and Puerto Rico's business community. There is no doubt that the current crisis affects everyone in Puerto Rico. Each of these stakeholders has an important perspective on the depth and impact of the financial crisis, as well as potential pathways to help address the current situation.

I believe that Puerto Rico can and will emerge from the current crisis and return to growth. The fundamental question is when and at what cost. The people of Puerto Rico are sacrificing, but unless that sacrifice is shared by creditors in an orderly restructuring, there is no path out of insolvency and back to growth. Without congressional action, Puerto Rico will face a long and difficult recovery that could have harmful consequences for the American citizens who call the island home. That is why we have called on Congress to act without delay.

With that, I am happy to take a few questions.

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