(Bloomberg Politics) — Democratic presidential candidate Hillary Clinton arrives in San Juan on Friday at a moment of crisis. Puerto Rico's governor next week is set to receive a plan to manage a crippling $72 billion in debt that he says it can't repay.
Clinton's topic for the visit: health care.
The dissonance indicates the difficulty of Clinton's political task. She hopes that Hispanic voters in this U.S. territory and mainland Puerto Rican strongholds, especially Florida, will be a key part of a winning coalition. She backs giving Puerto Rico's municipal agencies the ability to pursue Chapter 9 bankruptcy, something available to municipalities and agencies in the 50 states. But many creditors work at hedge funds, a key source of Clinton's campaign cash.
Clinton has said that bankruptcy should be used judiciously, an acknowledgement of the divided loyalties she's facing.
"We're not talking about a bailout, we're talking about a fair shot at success," she said in a July statement after Gov. Alejandro Garcia Padilla, a Democrat, announced that the island's debts were too big to be repaid in full. Puerto Rico's debts dwarf Detroit's record $18 billion municipal bankruptcy that shook markets in 2013.
As Clinton visits the epicenter of a crisis that threatens the stability of pensions and investment funds across the nation, Puerto Ricans and those who bet on the island's credit want to hear about how she'd manage the issue if elected president. The island has more debt than any U.S. state government other than New York and California, a sputtering economy and a population heavily dependent upon government aid.
The visit is Clinton's first campaign stop here since 2008, when she earned one of her final victories over Barack Obama in a 68 percent to 31 percent vote late in the primary process. Puerto Rico's 2016 vote is in March, when both parties are likely to be in the thick of their nomination battles, and the earlier slot on the calendar is drawing candidates to the commonwealth. Former Florida Gov. Jeb Bush, a Republican, and former Maryland Gov. Martin O'Malley, a Democrat, have already campaigned here, and Florida Sen. Marco Rubio, a Republican, will also be in San Juan on Friday, appearing at a fundraiser and a rally.
Clinton's main public event is a roundtable discussion at the Caribbean Cardiovascular Center, and she'll also appear at a fundraiser, tapping into the pockets of wealth that remain on this island.
While Clinton's focus on health doesn't directly address the debt crisis, it does reflect one of its root causes: money borrowed to support continuing expenses such as medical care. More than 60 percent of the island's population uses Medicare or Medicaid, but federal support is more limited than in the 50 states. The Medicaid reimbursement rate is 70 percent lower and Medicare reimbursement 40 percent lower, according to the Puerto Rico Healthcare Crisis Coalition. The commonwealth also gets additional Medicaid funding through the Patient Protection and Affordable Care Act (PPACA), but that is to dry up in 2019.
