U.S. President Donald Trump asked Congress on Tuesday for a $4.9 billion loan to help the cash-strapped Puerto Rican government pay its bills as the U.S. territory struggles to recover from Hurricane Maria, an administration official said.
Puerto Rico Governor Ricardo Rossello had asked for help with lines of credit in late September, saying his government was in a bind and did not expect to have any near-term revenue.
“The proposal to provide liquidity to the government represents an important first step for the transformation of PR,” Rossello tweeted on Tuesday evening.
Weighed down by nearly $72 billion in debt, Puerto Rico struggled with liquidity even before the most powerful hurricane in almost 90 years wiped out the island’s power grid, homes and other infrastructure nearly three weeks ago.
The territory, whose 3.4 million residents are American citizens, declared bankruptcy in May.
The community disaster loan proposed by the Trump administration would include a $150 million advance, the administration official said, speaking on condition of anonymity. Further details of the loan were not immediately available.
“The $4.9 billion loan would help them with short-term liquidity problems in financing,” such as payroll and pensions, the official said. “The money cannot be used for debt service.”
On Saturday, Rossello wrote to Trump pleading for a broad assistance package of at least $4.6 billion through a variety of government programs in what he called a “down payment on hurricane recovery efforts” as the island assesses the damages.
“Absent extraordinary measures to address the halt in economic activity in Puerto Rico, the humanitarian crisis will deepen,” Rossello said in the letter, warning the situation could lead to an exodus from the island to the mainland United States.
Moody’s (MCO)last week estimated the hurricane’s total cost to Puerto Rico, including lost output, at $45 billion to $95 billion.
The Trump administration and Congress have so far focused their funding efforts on immediate disaster relief. The U.S. House of Representatives is expected this week to consider a request for an additional $13 billion in disaster relief funds for hurricane victims in Puerto Rico, Texas and Florida.
The White House has also asked federal agencies to estimate by Oct. 25 how much money will be needed for longer-term rebuilding after the hurricanes.