Editorial

Aiding an Island Whose Citizens Are Our Own

Posted

Puerto Rico’s simmering debt crisis reached a dangerous turning point with the island’s default last week on most of a $422 million payment toward the $72 billion it owes to bondholders.

The next payment, of $2 billion, is due July 1, and the struggling commonwealth will be no closer to having those funds on hand than it is now. The political status of the island, home to 3.5 million people, leaves it with virtually no path out of the crisis.

As a non-incorporated territory of the United States, Puerto Rico is equivalent to a colony. As such, it cannot declare bankruptcy under the U.S. Bankruptcy Code, and because it is not a sovereign nation, it is not eligible for help from the International Monetary Fund.

Only Congress and the White House can step in at this point, either by altering the bankruptcy code to allow a restructuring of the debt or possibly by appointing a financial control board to supervise future spending.

Proposals to that effect have been floating around in Congress for months and seem to have a degree of bipartisan support, especially when it’s pointed out that this scenario is not a taxpayer-funded bailout and would involve oversight to guide the island’s budgeting.

Archbishop Thomas G. Wenski of Miami, chairman of the U.S. bishops’ Committee on Domestic Justice and Human Development, warned Congress in a letter last December that the situation is dire. He urged Congress to allow Puerto Rico protection under U.S. bankruptcy laws.

The suffering people of Puerto Rico, he wrote, are at the mercy of their political structure and their creditors. They bear “little responsibility for the situation yet (they) suffer most of the consequences.”

Archbishop Roberto Gonzalez Nieves of San Juan, who served in the Bronx as a young priest, told a magazine interviewer in March that Congress must act quickly because the island is “in a very, very difficult situation, which is beginning to create a humanitarian crisis.”

But many of Puerto Rico’s creditors—hedge funds and other bondholders—have balked at compromising over fears that their investments will be devalued, and some are actively mounting campaigns in opposition.

Whatever is done—and there is no question that something must be done—it has to be soon.

As Puerto Ricans sink further into poverty with the downward spiral of the island’s economy, thousands of its people, many of them college graduates, have left for the U.S. mainland, where they have full citizenship, in search of jobs and a better life.

We’ve seen that phenomenon before, with the first large migration of Puerto Ricans after World War II, when their destination was New York. It was the first major influx of Hispanics to the Northeast, and it was a challenge to the city as it tried to absorb them and to the newcomers as they tried to fit in.

In the archdiocese, the arrival of Puerto Rican Catholics sparked the development of a ministry to Hispanics that has grown into one of the largest and most important apostolates of the Church in New York, serving not just the original Puerto Ricans and their descendents, but also the Dominicans, Mexicans, Ecuadoreans and other Hispanics who followed.

And while many descendents of the early Puerto Rican migrants have assimilated and dispersed to other areas, following the path of other newcomers to this country, their legacy in the city and in the Church is a proud one.

We support efforts to help their fellow Puerto Ricans during this crisis. It’s the right thing to do for the island’s people, and it’s the responsible path for the U.S. government to take.