US Congress Would Not Bail Out Puerto Rico - Financial Consultant

President of the financial consultant firm Ely & Company, Inc., Bert Ely claims that the US Congress would not bail out Puerto Rico because of the unfair precedent it would set for struggling US states and cities.

WASHINGTON (Sputnik), Leandra Bernstein — The US Congress would not bail out Puerto Rico because of the unfair precedent it would set for struggling US states and cities, president of the financial consultant firm Ely & Company, Inc., Bert Ely, told Sputnik on Tuesday.

“I do not see the United States Congress bailing out Puerto Rico, because the precedent it would set would be very troubling both for municipalities as well as for states themselves,” Ely said.

On Monday, Puerto Rico Governor Alejandro Garcia Padilla announced the US territory could not pay its $73 billion debt and would soon run out of money to fund the government.

“With the political pushback, particularly to do it for an entity that is not even a [US] state, I just don’t think it is going to happen,” Ely noted of Puerto Rico’s status as a US territory.

Following the 2008 financial crisis, a number of large cities in the United States went bankrupt without receiving bailouts from the US federal government. From 2011 to 2013 Detroit in Michigan and Birmingham in Alabama as well as a number of cities in California declared bankruptcy.

Over the past five years, the US states of Illinois, California and New York had been on the verge of bankruptcy.

On Monday, the White House stated that the United States was not considering bailing out Puerto Rico.

The International Monetary Fund released a report on Sunday’s of Puerto Rico’s $73 billion debt, calling for debt restructuring and tough austerity measures.