White House budget director Mick Mulvaney on Wednesday walked back President Trump’s comments calling for Puerto Rico’s debt to be wiped out.
“I would not take it word for word,” he told CNN. “We are not going to deal with the fundamental difficulties Puerto Rico had before the storm.”
In a separate interview with Bloomberg News, the Office of Management and Budget chief was even more explicit in saying the hurricane-ravaged island would have to fix its debt problem on its own.
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“We are not going to pay off those debts,” Mulvaney said. “We are not going to bail out those bond holders.”
Trump roiled financial markets with his claim Tuesday the federal government would need to wipe out its $74 billion municipal debt.
“They owe a lot of money to your friends on Wall Street and we’re going to have to wipe that out,” the president said during an interview with Fox News. “You can say goodbye to that.”
The island’s general obligation bonds plunged to a low of 34 cents on the dollar, according to a CNBC report.
Trump has repeatedly cited the debt as a major obstacle for the U.S. territory as it recovers from Hurricane Maria.
The territory’s government has struggled for decades with massive budget deficits caused by overspending. It has borrowed more than $70 billion to fund day-to-day operations and other functions.
The White House is reportedly seeking a $29 billion aid package from Congress that would assist victims of Hurricanes Harvey, Irma and Maria, which primarily affected Texas, Florida and Puerto Rico respectively.
“We are going to focus our attention on rebuilding the island and repairing the island and making sure everybody is safe and we get through the difficult times,” Mulvaney said on CNN.
The president’s latest comments came after he visited Puerto Rico on Tuesday. Maria, which hit the island as a Category 4 storm, left most residents without electricity, running water and adequate food supplies. Local authorities say 34 people have died as a result of the storm.
Rebecca Savransky contributed