Earned Income Tax Credit for Puerto Rico in President's Budget
Sharon Edmondson, Washington Legislative Team Member | February 10, 2016
President Obama’s FY2017 budget includes $601 million in allotments to extend the earned income tax credit to Puerto Rico.
In a section mentioning the allotment the OMB reiterated the Treasury Department’s original October legislative proposal for the island, which included the credit extension.
Treasury’s reiteration of the legislative proposal to Congress lacks specific mention of Chapter 9 bankruptcy for Puerto Rico, which Treasury still supports but has moved away from. Treasury officials said that the department would favor a solution written through the Territorial Clause of the Constitution rather than any adjustment to the bankruptcy code.
Other signs for a solution for Puerto Rico’s financial problems include the creation of a restructuring authority given to a control board which might prioritize debt repayment at levels higher than $1.9 billion per year, which Puerto Rico had proposed in the past.