White House rules out forgiving Puerto Rican debt

The White House threw cold water on the prospect of forgiving Puerto Rico’s debt days after President Trump floated the idea as a way to help the island deal with widespread damage from Hurricane Maria.

When asked about Puerto Rico’s more than $70 billion in debt, White House press secretary Sarah Huckabee Sanders said that the best thing for the island will be for it to use the normal process set up to deal with its debt.

“There’s a process for how to deal with Puerto Rico’s debt, and it will have to go through that process to have a lasting recovery and growth,” she said Thursday.

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“That is a process that was put in place and set up under [former President] Obama, and has a board of advisers that deals with that debt. It’ll go through that process as we move forward,” she continued.

Trump appeared to signal an openness to wiping out Puerto Rico’s debts during an interview with Fox News on Tuesday, a claim that sent markets spinning with the possibility that creditors would not be paid back. Puerto Rico’s bonds reportedly plunged upon those comments.

“They owe a lot of money to your friends on Wall Street and we’re going to have to wipe that out,” Trump said. “You can say goodbye to that.”

The administration has worked over the past few days to walk back those comments. Office of Management and Budget Director Mick Mulvaney told CNN on Wednesday that Trump should not be taken “word for word” and later told Bloomberg News, “We are not going to pay off those debts.”

In 2016, Congress established a debt oversight board tasked with controlling the island’s budget and debts as a way to deal with spiraling debt in the U.S. territory.