White House: No federal bailout for Puerto Rico

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The Obama administration is not considering a federal bailout of Puerto Rico to help it emerge from a crippling debt crisis, a White House spokesman said Monday.

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“There is no one in the administration or in D.C. federal government that’s contemplating a federal bailout of Puerto Rico,” press secretary Josh Earnest said.

Puerto Rico’s governor declared over the weekend that the island could not repay more than $70 billion in debt, a situation that could spook financial markets at a time when Greece is also facing a severe debt crisis.

Earnest said the administration is committed to working with Puerto Rican officials to resolve the crisis.

The federal government’s assistance to Puerto Rico will be similar to what it offered to Detroit, Earnest said, consisting of advice from a panel of administration officials and experts. Detroit declared Chapter 9 bankruptcy in 2013, which helped it emerge from its own financial crisis.

Earnest also said Congress should consider giving Puerto Rico the ability to file Chapter 9 bankruptcy to restructure its debt and allow creditors to recoup some of their investments. 

--This report was updated at 2:12 p.m.