Last night at the Republican Debate in Houston, Puerto Rico’s debt crisis made a second appearance in the GOP contest, when Marco Rubio was asked a question from María Celeste Arraras. Here is the transcript:
ARRARAS: I want to talk to you, Senator Rubio, about Puerto Rico. As you know, Puerto Rico’s in the midst of financial collapse, unable to pay its debt of $72 billion dollars. Puerto Rico is asking for bankruptcy protection which would give Puerto Rico, and Puerto Ricans, which are U.S. citizens, you know that — the tools to restructure the debt. That is the same debt the other 50 states have.
You oppose granting Puerto Rico that bankruptcy protection. You say that it is only a last resort measure, but the government of Puerto Rico has said that bankruptcy is its last resort. That that’s where they are now. How do you explain this very strong stance to the hundreds of thousands of Puerto Ricans that vote across the U.S. , and particularly in your state of Florida?
RUBIO: Sure, because bankruptcy doesn’t work unless you change the way you’re operating, or you’re going to be bankrupt again. And, the problem with Puerto Rico is its economy is not growing. It has a massive exodus of professionals and others that are leaving to my home state of Florida, and all over the country.
They’re coming to the mainland from Puerto Rico because the economy there is not growing, it’s too expensive to do business there. The tax rate is too high. The government regulations are too extensive.
This year alone, with all the problems they’re having, they barely cut their budget from one year to the next. So, I think the leadership on the island has to show their willingness to get their house in order and put in place measures allow the economy there to grow again. If the economy of Puerto Rico does not grow they will never generate the revenue to pay this debt, or the billions of dollars in unfunded liabilities that they have on their books of promises they’ve made to future generations to make payments.
So, yes, if they do all of those things then we can explore the use of bankruptcy protection, but not as the first resort, which is what they’re asking for, because it will not solve the problems on the island and you’re going to continue to see hundreds of thousands of people leave that beautiful place, and coming to the mainland.
They’re United States citizens, they’re obviously entitled to do so, and we welcome them, but we would also prefer to see a Puerto Rico that once again is growing economically, and is robust. And, the leaders in charge there now are doing a terrible job.
Their previous governor, Luis Fortuño was doing a great job until he barely lost that election to…
RUBIO: … to someone who has taken a big government stance (ph) once again…
Rubio’s answer did explore some of the issues surrounding the island’s fiscal ills, but he forgot to provide some context to the reasons why Puerto Rico is in the situation in the first place. For example, Rubio did not mention that the crisis has been brewing for close to 40 years of Puerto Rican government administrations, no matter if they were Republican governors (Luis Fortuño) or Democratic one (Aníbal Acevedo Vilá). The following chart categorizes how the debt has accumulated over time, including additional federal recovery funds Fortuño’s administration received:
This week, the US Treasury is asking that Congress pass bankruptcy protection for the island.
For more on the causes about the crisis, listen to “Puerto Rico Underwater” from NPR’s Latino USA: