Congress has until midnight on Friday night to avoid a partial government shutdown by passing a spending bill to fund government operations.
While most investors are hoping to avoid the headache of a shutdown, at least one class of investors may be hoping negotiations continue to be hard-fought.
According to Height Securities’ Stefanie Miller, Congressional Democrats will likely be pushing to help out Puerto Rico and its bond investors. On Wednesday, President Donald Trump seemed to confirm this belief on Twitter.
Democrats are trying to bail out insurance companies from disastrous #ObamaCare, and Puerto Rico with your tax dollars. Sad!
“We think it’s likely that as a part of the current FY 2017 government funding fight, Democrats can be successful in appropriating a new round of short-term financing to help Puerto Rico backstop its cash-strapped Medicaid program,” Miller explained.
While Height says both Republicans and Democrats agree that it’s in the best interest of the U.S. to avoid the worst-case scenario in Puerto Rico, there are differing opinions about the role the U.S. should play.
Miller believes Congress will opt for a “kick the can” approach in 2017 that involves another short-term cash infusion into Puerto Rico’s Medicaid program.
“Beginning in 2018, we think…
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