Updated 06:42 AM EST, Thu, Nov 26, 2020

Puerto Rico Governor Forced to Choose Between Giving Christmas Bonuses to Workers or Paying Agencies' Over $900 Million Debt

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The choice between giving employees and workers Christmas bonuses, or paying the country's more than $900 million debt is something that Puerto Rico Governor Alejandro Garcia Padilla needs to make.

Bloomberg said Padilla faces this dilemma as the financial problem of the country continues to get worse. It noted that he can choose to pay $120 million in bonuses by Dec. 20 or just pay the $957 debt of the country.

"Puerto Rico's constitution stipulates that officials must first pay general-obligation debt before other expenses," added the same report.

But it was also highlighted that handing out holiday checks to employees will cause a $150 million "economic impact" on the country.

"It's a very difficult decision for the government, having to decide between paying your workers and defaulting on government debt," said research group Center for a New Economy director Sergio Marxuach.

As per Bloomberg, a 1969 law stipulates that government workers should receive bonuses if they work at least 700 hours.

"I have to do everything in my powers to pay that money. If I have the funds, I have no option but to pay that money," said Garcia in the same report.

The governor also told Reuters that he strives to provide bonuses to the employees since the law dictates the payment of bonuses, and that the obligation should not be waived.

"[It is] part of the salary for workers ... I have to do everything in my power to pay that money," added the Puerto Rican governor.

Alejandro García Padilla earlier admitted that the country has run out of cash because of its $70 billion debt, prompting the US Congress to suggest ways on how to remedy the situation.

CNN Money said the legislative body presented two bills that could help Puerto Rico recover from its humanitarian crisis.

The first option is to offer the country "cash, tax cuts and oversight but no legal power," while the second one has no monetary offering, but gives the country the legal power for it to be able to restructure some debts.

For the first option, CNN Money said the Republican-led senate finance committee has proposed a bill that will offer Puerto Rico $3 billion in emergency cash.

"Additionally, it would provide federal oversight to ensure Puerto Rico has sustainable debt plans going forward," added the same report.

According to Mother Jones, the bill also includes a 50 percent cut in the payroll tax of Puerto Rico residents in the next five years.

The second option was proposed by Rep. Sean Duffy in a bill that will offer no financial help to the country, but will give it "access to Chapter 9 bankruptcy," as per CNN Money.

But, it noted that there is a big catch for this one, as most of Puerto Rico's debt doesn't belong to the Chapter 9 bankruptcy, but rather to the country's central government.

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