A woman pulls a trash can past a destroyed home as Hurricane Maria hits Puerto Rico in Fajardo. | Ricardo Arduengo/Getty Images Storm-battered Puerto Rico looks to Washington for help

As Puerto Rico reels from the devastation of Hurricane Maria, the Trump administration and Congress are pledging to provide more aid to the commonwealth, which is already suffering from a historic debt crisis.

Tax breaks and more Medicaid funding could be a part of a recovery package, and activists would like to see debt relief for the U.S. Virgin Islands attached as well. Though damage assessments have only begun, the post-Katrina and Sandy relief bills likely will serve as guideposts for Congress.


“This is a natural disaster in Puerto Rico like we haven’t seen ever,” said Carlos Mercader, executive director of the commonwealth's Federal Affairs Administration. “Think about Katrina but even worse because this is the whole island.”

President Donald Trump vowed Thursday to visit Puerto Rico, which lost 100 percent of its electrical power in the Category 4 storm, and House Speaker Paul Ryan promised a second recovery bill in Congress after the House and Senate passed a disaster relief package after Hurricane Harvey.

Maria’s crippling impact will also force Puerto Rico and the federal board that Congress created last year to oversee its finances to reassess how to bring the territory out of its debt crunch and decade-long recession.

Hurricanes Maria and Irma greatly complicate the tangled debt web that has ensnared Puerto Rico and the Virgin Islands. The storms come just months after Puerto Rico entered a court-supervised restructuring process for its $70 billion debt — in what amounted to the largest municipal bankruptcy in U.S. history. And with a population of 100,000, the U.S. Virgin Islands owes even more money per resident on the $6.5 billion held by creditors than does Puerto Rico.

Morning Money Political intelligence on Washington and Wall Street — weekday mornings, in your inbox. Email Sign Up By signing up you agree to receive email newsletters or alerts from POLITICO. You can unsubscribe at any time. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Before Maria hit, Puerto Rico Gov. Ricardo Rosselló and the federal oversight board were locked in a battle over furloughs and pension cuts that the board said were necessary to balance the budget. The seven-member, bipartisan board had also approved a fiscal plan submitted by Rosselló that could face significant revisions after the storms.

“There’s no way they’ll make budget. There’s just no way,” said Luis Fortuño, who was governor of Puerto Rico from 2009 to 2013, and now a partner at the law firm Steptoe & Johnson. “Both the government and the oversight board had certain assumptions that are out the window now.”

That fiscal plan affects every decision made by Puerto Rico's government and charts a course for the commonwealth for the next 10 years. The oversight board has final say over revenue and spending decisions, so it must approve any changes.

Late Thursday, the board essentially gave Rosselló a pass on that budget, allowing him to re-allocate up to $1 billion at his discretion for emergency response efforts. The board also said it would help lobby federal agencies for further assistance.

“Furthermore, if the Government determines increases to the Territory Budget are needed to respond to Hurricane Maria, we stand ready to expeditiously approve such requests, in anticipation of much needed federal funding,” the board wrote to Rosselló. “To that end, we will join the Government of Puerto Rico in actively seeking FEMA and any other potential sources of federal funds for the recovery and reconstruction of Puerto Rico.”

This month’s storms may also temporarily align groups of creditors that have fought the board, the commonwealth government and each other for years over the billions owed to them by Puerto Rico. Though lobbyists for creditors contacted by POLITICO had not yet made specific plans, they may be willing to cooperate because Puerto Rico will be able to pay its debts quicker if there’s a robust recovery.

Ryan also offered words of sympathy and support.

"To our fellow citizens in Puerto Rico, they are front and center in our thoughts and we want them to know the federal response will be there," the House speaker said during a visit to sections of Florida damaged by Hurricane Irma.

Rep. José E. Serrano (D-N.Y.), a member of the House Appropriations Committee, which is likely to write the aid package, said he would reach out to its chair and ranking member over the weekend to urge funding to the territories affected by the storms. He also wants to see a panel set up for Puerto Rico similar to the one established for New York after Superstorm Sandy to guide reconstruction.

“I’m asking President Trump to do the same thing for Puerto Rico [as after Sandy], that looks at the needs they have now and the needs they have in the future,” Serrano said.

Trump said yesterday that the U.S. is starting the process of helping Puerto Rico and will work with Rosselló. Mercader, the point person for Puerto Rico with the federal government, said the level of commitment and response from the Trump administration pleasantly surprised him.

“It’s been more than what I expected,” he said. The commonwealth and federal responders also hoped to bring online a joint operations center in San Juan’s convention center by the end of the day Friday.

So far the government has confirmed six storm-related deaths, though the tally could climb much higher. Mercader’s office in Washington was deputized to field emergency calls from Puerto Rico as most of the commonwealth’s communications went offline.

Entire sections of the island have yet to be heard from, and even local government agencies were having a hard time reaching one another to coordinate, creating a “cloud of uncertainty,” Mercader said. Mudslides and flooding continued in areas, and FEMA will send helicopters to try to reach towns that have become inaccessible by road.

In the longer term, the fallout from the recent hurricanes could also bring more attention to the debt crisis in the Virgin Islands.

Eric LeCompte, executive director of Jubilee USA, a religious-affiliated organization that lobbied on behalf of debt restructuring for Puerto Rico last year, said his group would push for the Virgin Islands to be treated as Puerto Rico was in disaster relief legislation.

“Congress is going to have to step in in some new ways,” said LeCompte. “At this point, no one’s going to get paid anyways.”

Jubilee, which has ties to about 650 faith-based groups and organizations, would also push for the U.S. to lead the charge on a temporary debt moratorium on money owed to the International Monetary Fund by non-U.S. Caribbean islands affected by the storms. The U.S. holds more votes than any other country in the IMF.

“We’re just looking at delaying payments for six months to a year,” during the disaster recovery, LeCompte said.

Puerto Rico’s government praised Trump and the Department of Homeland Security for their response efforts. But the territories, used to receiving less attention than states despite their own U.S. citizenship, remain concerned that Congress and the White House will forget them after floodwaters recede and the winds die down.

“There ought not to be a difference” between the response to Harvey’s flooding of Texas and Irma and Maria’s buffeting of the U.S. Caribbean, Fortuno said.