“I think the president knows that in order for Puerto Rico long-term to fix itself it's going to have to deal with that debt situation,” Office of Management and Budget Director Mick Mulvaney said. | Alex Wong/Getty Images Mulvaney: Don't take Trump's comment on wiping out Puerto Rico debt 'word for word'

Office of Management and Budget Director Mick Mulvaney on Wednesday appeared to dial back President Donald Trump’s suggestion that the U.S. would help wipe out Puerto Rico’s massive debt load.

“I wouldn't take it word for word with that,” Mulvaney said on CNN. “I spoke to the president about this at some length yesterday as we flew home on Air Force One, and what we are focusing on right now is … the federal effort is to make sure the island is safe and that we're rebuilding the island.”


Trump on Tuesday sparked confusion when he told Fox News in an interview that people are “going to say goodbye” to Puerto Rico’s debt problem.

“They owe a lot of money to your friends on Wall Street and we’re going to have to wipe that out,” Trump said. “You’re going to say goodbye to that, I don’t know if it’s Goldman Sachs but whoever it is you can wave goodbye to that.”

Trump has repeatedly noted that Puerto Rico, which declared a form of bankruptcy in May, was in rough financial shape before hurricanes Maria and Irma wreaked further havoc on the U.S. territory last month. While visiting Puerto Rico on Tuesday, Trump said the island had “thrown our budget a little out of whack because we’ve spent a lot of money on Puerto Rico.”

While it’s unclear what exactly Trump meant by wiping out Puerto Rico’s debt, the U.S. territory’s benchmark general obligation bond tumbled to a record low price on Wednesday after the comment.

During his interview with CNN on Wednesday morning, Mulvaney said it’s clear that Puerto Rico needs to confront its poor financial situation.

“I think the president knows that in order for Puerto Rico long-term to fix itself it's going to have to deal with that debt situation,” he said. “The country — excuse me, the territory — was very poorly run for a very long time. Right now they are paying their pension payments, the pension that comes due at the end of the month, they're paying out of their operating accounts. This was a very badly mismanaged island for a very long time, and I don't think I'm making any news by saying that.”

