Elizabeth Warren: We Helped the Big Banks. Why Not Puerto Rico?

Elizabeth Warren had a message for the Obama administration today: Be as creative in finding a solution for the 3.5 million American citizens in Puerto Rico as you were in protecting bank profits after the 2008 crisis.

The issue arose in a Senate Energy and Natural Resources Committee hearing on Thursday morning about the island commonwealth, which owes $73 billion in debt it cannot repay. A large chunk of the debt is owned by so-called “vulture funds” that picked it up at a discount. The creditors want Puerto Rico to find the funds to pay them off by drastically cutting services and selling assets, guaranteeing continued economic recession for the island’s inhabitants.

Late Wednesday, the Obama administration released a “Roadmap for Congressional Action” to deal with the debt crisis. It included allowing Puerto Rico to obtain bankruptcy protection, which is currently barred by U.S. law. But the report adamantly stated that, while administration officials are working closely with the Puerto Rican government, “there is no set of administrative authorities that can fully address and resolve this crisis… only Congress can provide the critical tools Puerto Rico needs to restructure its debt.”

The hearing gave Warren an opportunity to respond. Antonio Weiss, a counselor to Treasury Secretary Jack Lew and one of the administration’s leading point people on the debt crisis, gave testimony at the hearing. Warren and Weiss have a history. He was initially nominated to serve in the No. 3 position at Treasury, but after Warren criticized his lack of regulatory experience and Wall Street ties — Weiss spent 20 years as an investment banker at Lazard — he withdrew his nomination, taking the counselor position instead. This hearing was the first time Warren and Weiss have appeared together in public since his withdrawal.

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http://www.thefiscaltimes.com/Columns/2015/10/22/Elizabeth-Warren-We-Helped-Big-Banks-Why-Not-Puerto-Rico