Feds And Puerto Rico Reach Deal Allowing Disaster Recovery Loans To Start Flowing : The Two-Way Puerto Rico's governor had been locked in tense negotiations with the U.S. Treasury over terms governing $4.7 billion in loans that Congress approved to help the island recover from Hurricane Maria.
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Feds And Puerto Rico Reach Deal Allowing Disaster Recovery Loans To Start Flowing

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Feds And Puerto Rico Reach Deal Allowing Disaster Recovery Loans To Start Flowing

Feds And Puerto Rico Reach Deal Allowing Disaster Recovery Loans To Start Flowing

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NOEL KING, HOST:

Treasury Secretary Steven Mnuchin visited Puerto Rico yesterday, and he made a deal with the island's governor, Ricardo Rossello. The agreement allows Puerto Rico to access disaster recovery loans that had been on hold for months. NPR's Adrian Florido has the story.

ADRIAN FLORIDO, BYLINE: Congress approved $4.7 billion in loans for Puerto Rico in October, weeks after Hurricane Maria devastated the island. Until yesterday, Rossello and Mnuchin had not been able to agree on loan terms. It's been five months of tense negotiations. Mnuchin wanted strict terms to ensure that the island, already heavily in debt, repays the loans. The governor accused him of, quote, "recklessly delaying access to congressionally-approved funding, harming Puerto Rico's recovery." Yesterday, with Mnuchin beside him, Rossello announced a deal.

(SOUNDBITE OF ARCHIVED RECORDING)

RICARDO ROSSELLO: We've reached an agreement that is beneficial for both the taxpayer and the people of Puerto Rico.

FLORIDO: The two men said they'd found middle ground on several sticking points - one being repayment. Rossello said the Treasury was no longer demanding repayment get priority even if it meant cutting essential services like electricity and water.

(SOUNDBITE OF ARCHIVED RECORDING)

ROSSELLO: We want the taxpayer to protected, but we also want the U.S. citizen that lives in Puerto Rico to have guaranteed essential services. And both of those objectives were agreed upon.

FLORIDO: Another issue was at what point the island will be low enough on cash to gain access to the loans. Puerto Rico currently has about $1.5 billion in the bank. And the Treasury had said it would only allow access to the loans once that fell to 800 million. They agreed on 1.1 billion. On one of the biggest issues, though, they held off on deciding. That's whether the loans might ultimately be forgiven. Disaster recovery loans often are. But according to Rossello, the Treasury had said that in this case, absolutely not. By Thursday, Mnuchin seemed to have softened.

(SOUNDBITE OF ARCHIVED RECORDING)

STEVEN MNUCHIN: It is something we would consider down the road for the benefit of the people if it's needed.

FLORIDO: The deal still needs approval from Puerto Rico's legislature, the federal board overseeing the island's finances and the federal judge ruling over its bankruptcy case. Adrian Florido, NPR News, San Juan, Puerto Rico.

(SOUNDBITE OF MAMMAL HANDS SONG, "BOREAL FOREST")

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