White House: When Trump Says "Wipe Out" Puerto Rico's Debt That Doesn't Mean "Bail Them Out"
"We are not going to bail them out," says OMB director Mick Mulvaney
White House budget chief Mick Mulvaney walked back the president's statement that "you can wave goodbye" to Puerto Rico's debt, arguing that you can't take Donald Trump "word for word" because the government is "not going to bail them out."
"They owe a lot of money to your friends on Wall Street. We will have to wipe that out," he said. "I don't know if it's Goldman Sachs, but whoever it is, you can wave goodbye to that," Trump said.
One observer likened Trump's statement suggesting debt relief to a Snapchat message—which is automatically deleted.
That's because on Wednesday when asked by CNN if the president's suggestion of debt relief should be taken "seriously on its face," Mulvaney said, "I wouldn't take it word for word with that."
Asked to clarify why the president said the debt would be wiped out, Mulvaney argued that "what you saw the president talking about was his acknowledgment that Puerto Rico is going to have to figure out a way to solve that debt problem in order to fix itself going forward."
Watch the exchange below:
In a subsequent interview with Bloomberg, Mulvaney was even more explicit, saying, "We are not going to bail them out. We are not going to pay off those debts. We are not going to bail out those bond holders."
According to author and activist Naomi Klein, wiping out the debt is exactly what Democrats should be pushing for:
Others agree. Rallies are being held Wednesday in cities across the nation calling for cancellation of the debt. In a call-to-action "against the big banks that still want to profit off the island even after Hurricane Maria's devastation," the Vamos4PR network declares: "It's immoral to insist that before Puerto Rican families can rebuild their homes, their hospitals, their schools and their roads, they must first pay back the banks. It's time to eliminate Puerto Rico's public debt altogether!"
Eric LeCompte, executive director of the religious development organization Jubilee USA, has also argued that the damage wrought by Hurricane Maria was worsened by the debt crisis.
"Puerto Rico can't recover with the debt it has," he said. "Puerto Rico was already undergoing a bankruptcy process that was going to substantially cut the island's debt. Now that bankruptcy process needs to access the hurricane damage and cancel even more of the debt," he said.
Writing for Common Dreams on Tuesday, authors Stan and Paul Cox said wiping out Puerto Rico's debt is a "moral necessity."
"To expect Puerto Rico to rebuild from this unnatural disaster while at the same time bailing out Wall Street financiers," they argued, "is to condemn its residents to a permanent state of crushing hardship and impoverishment."
They concluded, "What was legally and morally odious before the storm is pure cruelty now."
"To expect Puerto Rico to rebuild from this unnatural disaster while at the same time bailing out Wall Street financiers is to condemn its residents to a permanent state of crushing hardship and impoverishment," they write.