Trump asks Congress for $4.9 billion loan to Puerto Rico

White House Reuters

(Copyright 2017 The Associated Press. All rights reserved.)

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 it struggles to recover from Hurricane Maria, an administration official said.

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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.

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, home to 3.4 million Americans, 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."

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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.

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Moody's 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 to this week 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.

(Reporting by Roberta Rampton; Editing by Chris Reese and Tom Brown)

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