An ecumenical coalition of Puerto Rico's religious leaders -- including nearly all of the island's Catholic bishops -- issued a joint call Monday for the U.S. Federal Reserve to step in and restructure the U.S. territory's some $72 billion debt to prevent possibly calamitous austerity measures.
Eighteen religious leaders -- including five Catholic bishops and the heads of Pentecostal, Methodist, Lutheran and Evangelical churches -- issued the call, citing the biblical notion of Jubilee.
The leaders say that if Congress does not extend bankruptcy protection to the island, which because of its status as an unincorporated U.S. territory cannot file for bankruptcy relief under the normal process like U.S. states or cities, the Fed should use its power to step in and "ensure debt relief without harmful conditions."
"As a society, we cannot allow more austerity measures that adversely affect the poor and needy in Puerto Rico," state the leaders in their call, released Monday morning.
"Those who lend money at high interest rates knowing that it is a heavy burden to the fiscal health of the people have no moral strength to demand austerity measures affecting essential services, jobs and opportunities of an economic resurgence," they say.
"In the absence of Congress extending bankruptcy protection to Puerto Rico, we must call for greater involvement from the Federal Reserve to act and to arbitrate our debt," they continue. "The Federal Reserve has the power to act and should act."
Archbishop Roberto González Nieves, who heads the Catholic community in the island's capital of San Juan, said that the leaders decided to join together because of the enormous impact they have seen the territory's debt have on everyday life for people in their communities.
Citing figures that more than half of Puerto Rico's population lives under the poverty line, González said: "Any further austerity would affect enormously the quality of life of families, young people, young professionals, and especially the poor."
The current plan to pay the back the debt, González said in a phone interview, "translates to unemployment, to lack of services." The archbishop said he had been told that, should the austerity plan go forward, some 1 million Puerto Ricans who have health care would lose it by the end of 2016.
"That would be absolutely a disaster," he said.
"We understand that there's another option, which would be provided by the Federal Reserve of the United States," said González. "We really want our political leadership to explore that possibility; the political leadership in Puerto Rico and the United States."
Puerto Rico's government has been working on a plan for some sort of negotiated settlement on the territory's debt since June, when Gov. Alejandro García Padilla announced that the island would not be able to pay its debts without some extensive restructuring.
Billions of the territory's debt is owned by hedge funds, which sometimes buy expensive debts considered to be in imminent default for much lower than their original value and then later seek collection on the full value.
González and the other religious leaders made the call for the Federal Reserve to step in after seeking advice from the Jubilee USA Network, an alliance of U.S. organizations and faith communities that advocates for fair debt arbitration and debt relief.
Eric LeCompte, the executive director of the network, said the Federal Reserve could use similar powers in Puerto Rico to those it used during the 2008 economic downturn to bailout large banks in order to stabilize the U.S. financial system.
"The Federal Reserve has the power to restructure the debt in such a way that there would be no austerity policies and be a significant of debt relief," said LeCompte. "If Congress doesn't act, then the Fed needs to act."
González, archbishop of San Juan since 1999, focused on the situation being faced by ordinary families on the island, where prices are rising significantly because of the foreseen increase in austerity measures and many have already left to try and find work on the mainland or elsewhere.
As an example, the archbishop cited electricity costs, which were already already two to three times the average of mainland U.S. rates. González said the monthly bill for his own residence has risen 260 percent.
"That kind of an increase for an ordinary family is a tremendous bill," he said. "The cost of living, generally, has skyrocketed."
During the past ten years, González said, some 1 million Puerto Ricans have left the island, mainly to seek work in the States. Now, he said, another group is returning because they were unable to find employment.
"If that trend continues, the situation will become even more complex and more painful," he said. "It has a tremendous impact on the family. Some families become separated, one from another, and that has an emotional and psychological impact."
"Just walking around, you see many storefronts for rent," said González. "Previously, they were family businesses."
In their joint statement, released in both Spanish and English Monday, the religious leaders say they are making their call for Jubilee echoing both the prophet Isaiah and Jesus.
They leaders cite six principals they say by which the debt crisis should be resolved: There be no more austerity policies, relief focus on growing the economy, debt be brought to manageable levels, the territory have a transparent budget process, solutions "protect Puerto Rico's people," and there be a "multi-sectorial participation" in debt negotiations.
The leaders also align themselves with other nations facing debt crises, such as Greece and Argentina, and call for a global bankruptcy process.
"As people of faith we are called to be present always to the most vulnerable among us," they state. "As people of faith, we believe that we are closest to the Creator when we are sharing God’s abundant creation among us. As people of faith we pray for an end of poverty and inequality. As people of faith, we call for relief and Jubilee for all people."
Other Catholic leaders signing the statement include the bishops of Caguas, Ponce, Mayaguez, and Fajardo-Humacao.
Among other signers are: Rev. Adalberto Rodríguez, president of the Pentecostal Fraternity of Puerto Rico; Rev. Roberto Dieppa Báez, executive minister of the Baptist Churches of Puerto Rico; and Rev. Rafael Moreno Rivas, Bishop of the Methodist Church in Puerto Rico and president of the Puerto Rican Council of Churches.
González, the Catholic archbishop, said having such a diverse range of signers is significant.
"I believe that it's the first time that we have so many religious leaders signing a joint a statement, and in that sense it's very significant," he said.
The archbishop also said that he is planning to travel to Washington in late September to speak with political leaders about the issue.
Asked if he thought Pope Francis might mention the matter during his visit to the United States, González responded: "Well, that would be out of my hands to speculate."
But he continued: "I think the pope's visit will generate a lot of good will, so a visit to Washington after the pope's visit could be very important."
[Joshua J. McElwee is NCR Vatican correspondent. His email address is email@example.com. Follow him on Twitter: @joshjmac.]