Puerto Rico goes bankrupt literally one day after White House bragged about blocking funding

The Trump administration’s recent decision to withhold money from Puerto Rico appears to be the key factor in the U.S. territory declaring bankruptcy.

Prior to Congress reaching a bipartisan agreement to keep the government funded through September of this year, Democrats initially included $295 million on Monday for the territory to shore up its Medicaid obligations. However, White House Office of Management and Budget Director Mick Mulvaney proudly boasted on Tuesday that the Trump administration refused to allow the money to get to the beleaguered island. Trump himself also promised in a tweet that no taxpayer dollars would be used to save Puerto Rico.

“You had the Democrats crying out that they got $295 million for Puerto Rico,” Mulvaney said in a press conference.

“Did not cost the taxpayer a penny. They wanted new money, they wanted a bailout. We wouldn’t give it to them.”

Protests have been ongoing in Puerto Rico all weekend and throughout this week, as citizens are protesting what they refer to as colonial austerity measures that are squeezing public infrastructure, pensions, and public sector jobs. Mariana Nogales Molinelli, an attorney who was once a candidate for Puerto Rico’s (non-voting) Congressional representation, told Mother Jones that even police officers will be joining the protests, given the effect the coming bankruptcy will have on their profession.

“[Law enforcement officers] are going to be affected also,” Nogales Molinelli said. “Their kids’ schools will be closed, and they will not have enough medical insurance. The situation could explode because of all the austerity measures and they are going to have to work under much more pressure and in conditions that are going to be very difficult for them.”

According to the New York Times, Puerto Rican governor Ricardo Rossello is petitioning for relief of the island’s roughly $120 billion debt obligations under a Title III clause for financially destitute U.S. territories. The law has never been used before, so Puerto Rico’s bankruptcy could establish new legal precedent. U.S. Supreme Court Chief Justice John Roberts will assign a bankruptcy judge to handle Puerto Rico’s case.


Tom Cahill is a senior editor for the Resistance Report based in the Pacific Northwest. He specializes in coverage of political, economic, and environmental news. You can contact him via email at [email protected], or follow him on Facebook by clicking here.