Connecticut U.S. Senators Urge Investment in Puerto Rico to Avoid Further Default

By:  Debora Timms

Members of Connecticut’s Puerto Rican community met in Hartford on Friday with U.S. Senators Chris Murphy and Richard Blumenthal to discuss Puerto Rico’s debt crisis.

Murphy began by discussing the importance of the cultural and economic connections between Puerto Rico and Connecticut, which more than 250,000 Puerto Ricans call home.

“As Puerto Rico rises, Connecticut rises. As Puerto Rico falls, Connecticut falls,” Murphy said.

Now Puerto Rico is falling through a financial crisis. To help address it, Blumenthal is pushing a bill that would give Puerto Rico a bankruptcy option. The Puerto Rico Chapter 9 Uniformity Act would provide Puerto Rico the same ability for its municipalities and public utilities to restructure debt that is currently only granted to all U.S. states.

Murphy stressed the need for action in Washington after what he called “decades of discriminatory behavior toward the Puerto Rican economy.”

The issue is particularly relevant in Connecticut. Murphy said 70 percent of municipal bond funds, the kind American citizens are invested in through their retirement accounts, contain Puerto Rican debt in their portfolio.

“If we don’t do something to stem this tide in Puerto Rico, to save the Puerto Rican economy,” Murphy said, “then every single retiree in this country will be affected - even though Connecticut will feel it first, and feel it most.”

Blumenthal likened the crisis in Puerto Rico to a house fire that will spread without action to put it out, but he also made it clear that the program he’s proposing is not a handout or a bailout.

“Including Puerto Rico under the bankruptcy code would involve no federal cost -- none -- not a dime of federal money,” Blumenthal said.

Puerto Rico needs investment in jobs and clean energy, Blumenthal said, as well as equal treatment under Medicare and Medicaid laws. He argued that it's about fairness, even though Puerto Rico is not a state and it lacks representation in Congress.

“The people of Puerto Rico are American citizens,” Blumenthal reminded everyone. “We need to treat them as equal to all Americans."

Puerto Rico has a payment due September 1, on its general obligation bonds.