May 2, 2016|
Tommy talks to Dr. Ben Zycher, Resident Scholar at AEI, and Dan Mitchell, a Senior Fellow at the Cato Institute, about the debt crisis in Puerto Rico.
Tommy talks to Kevin in Metairie about his wife's need for medication to cope with constant, chronic pain.
Tommy talks to WWL-TV reporter Meg Farris about a new report that New Orleans had more drug-related deaths than homicides.
Tommy talks to State Representative Cameron Henry about the current state and the future of TOPS.
Tommy talks to David Howard, Professor in the Dept. of Health Policy and Management at Emory University, about the state of Obamacare going forward.
Automatically Generated Transcript (may not be 100% accurate)
Thank you David you know we've been running commercials. Com. And thankfully so is as we do here you know you have pays the bills businesses business we're in we're publicly traded near you we wouldn't in the SEC would get involved and we've stockholders. And the board but that's not the point the point is it we have heard a lot about Puerto Rico and defaulting. And bailouts and out of anybody understands what the hex going on DU Null. I really don't there's no there are a lot of money trouble and a and a struggling so I don't know if this is like another gold Goldman Sachs thing where. I'm now a day they were sold junk star floor the big banks are involved I have no earthly idea but I think today is the day that day. Have to decide what they're doing or maybe they haven't they have already doctor bends actor joins is right now resident scholar. At the American enterprise institute of warnings that are. Thank you for taking the time when this we know nothing. Adding to be best to start with that as it relates to this Puerto Rico financial crisis a crisis of critique China. Take it from the beginning. Well sure. Poor Rico. Both the state government the commonwealth government. As a whole island a number it's borrowing and reduce the largest of which is the year. Electric power forward. Have accumulated over time about 73 billion dollars in. In debt. C Puerto Rico's considerable urgency sure municipal bonds in the U us. Item to populations away about three and a half for three point seven million students. It's about 20000 dollars per person. I see here it's population of Oklahoma. An economy smaller than Kansas and Libya Bahrain. Yeah those numbers two and then you go to the reason. Won the world. To the reasons that. The commonwealth is cumulative so much better first. The recall was granted by congress city nationwide tax exemption for its bonds knows stated. Has left. And so we reduce their borrowing costs even more there's some truth of the matter is that under do you under the constitution under federal law. Their bonds are not eligible for bankruptcy it. Protections. Under chapter nor remnants of that. As the effect of increasing to you. The certainty that the Barnes will be repainted because there's no option to sort of bankruptcy so from the viewpoint to creditors. Purchases of their bombs. He. Practically cameras are to bankruptcy mixer bombs request was risky. Yelling give back tis and using gonna be some remedial questions I can promise should directory due to the interest free nature of those. That means good. Tax and other words the there are many street tax exemption. Which means that purchases of bonds don't have to pay taxes and any state. For the interest they receive on Puerto Rico bonds as the effect of lowering interest rates. But I have to Puerto Rico master page to borrow a couple months and has the senators the and distracted. Creditors don't have to pay taxes mean are going to appear on purpose of the ball so technical. So many times we hear about tax free municipal bonds correct me if I'm wrong if you buy. A federal bond then you don't have to pay. Federal tax on a tip to pay state taxes at the where works if you buy a state bond. You have to pay state taxes not federal or doing a live. A few bars stay on and typically you don't have to pay state taxes terrorism that states. But if your Rosen and the different state to do you typically have to pay state income taxes on the interest. On the bones that you applied to different states and Puerto Rico in the nationwide tax exemption built in the federal law. And so in those states. Pentax interest. That creditors burn on. And there are political bond holdings that that is the tax benefit that the federal level. There's no state enjoys. That's presuming you get any return on him which. If they have a 73 billion dollar debt crisis and bankruptcy is not an option. So about the bond your holdings of Puerto Rico. Well all our open tool. Let's say a year ago. They look to not very different from. From the debt issued by India in the states. And then pupils are to realize that the Puerto Rico's steps were massive and and that they really couldn't be repeated who's been negotiation process going for a long time ago many many months. Between. From the Commonwealth's government officials and and various creditor groups. To do something about the fact that everyone understands that the steps to become so masses because the spending prophecy. On the part of the Puerto Rico government. Dot com. That's something had to be done and factors I mentioned earlier the poor re collector power Torre priest. It is the largest single borrower on the island it's about nine billion dollars to submit legally and in fact they didn't cut the deal would of the major creditor groups. But the creditors of Pickens haircut on the and news from allowed it to wage and repayment. And cut me a registry editors and other concessions and so there's simply no question. It's congress and keep its hands off campus. The creditors in support of various communities could do to reach an accommodation. I don't very little bell bonds soccer rather than back in college I think was with a money in banking or maybe finance. I think use a clip a coupon ride to get your year enters or something and and is that although electronically. Anymore or am I dead of the wrong about that and have people been the end paid their premiums on these bonds so long. Well no. Electronically yes most modern bonds there's no fiscal component system equities. That that's that's just the way you using the process potentially changes in fundamental. You late it was a late last year drinker early this year Puerto Rico missed a fifty million dollar interest payment. And there was some controversy over whether it was actually closed due to. Rico's government played some word games with a we're seeing. Legal requirements for the payment of interest of those bonds they claim that if there was no budget appropriation Beatrice done. Then the interest couldn't be paid legally under for the note default which means that it's silly in my view but that was your argument. The major problem now as well the government development corporation which column today. It is missing a 422. Million dollar interest payment. And is not going to period I guess there must be thirty day grace period so maybe it's not due to. To June 1 but it's simply not going to be paid and so in Ireland. The government development corporation. In the future. Tenders. Isn't is going to be in default and so this is going to be dual core excuse and then. It and some other not very happy ramifications to both the creditors and forces. Report Rico. And when you say miss interest payments that would be going to the bondholders and a form of a dividend or not. Well in the form of interest to do it and this is not nada not a profit taking me ask corporations it's it's an interest payment. Two on in the past borrowing constituent. Let's it was a long time ago professor hang on if he can a couple of minutes because onion some questions here. And the commercials that we're hearing the commercials are talking about. California yours and is next then New York in in terms of the federal government. Bailing them out is that all we're talking about here the American taxpayer. Funding this and another and get another question via text images. Well aware that we're at seventy. Three billion dollars go unless I guess he went to electrical. Improvements I don't know we'll talk more we come back doctor bands like their resident scholar at the American enterprise institute and I thought it was interesting. To go into this because we've all heard about it but I think few of us actually know what it is. Tommy Tucker beginning questions on Puerto Rico and what's going on over there in America bail and amount to 60187. 921 again on Baghdad and W I dike events like a resident scholar at the American Enterprise Institute talk about the Puerto Rico. Financial crisis 73 billion dollars and dead funds they can't. Paid the interest on and where does the United States fit into all of this in mind one is is our problem doctor. Well poor read the commonwealth it is so not a stated that it's part of the US. Rico. Citizens are US citizens they can move freely to view us. They're politically relevant again in New York Florida and other places so I think that this is an issue. Congress has been reduced to address. Because his sport Rico who's not a statement as part of. There. So would that be the political or the economic situation or look at a both in terms of the United States. And addressing it because we you know were blamed political commercials I didn't leave. From both sides saying you know but not our deal let him go in a California and New York I think to be next ever got the other sync yet California New York. Well I think I think you'll know it would be would be either at the top of the list in terms of states. With with debt problems. Two will get dumped in congress slapped if if they see Puerto Rico can bail out. Now like debt. Debt problems you mean bond default. Well I mean that I mean bond default so I mean unfunded. Budget liabilities in particular pension cost set that simply cannot be born. To get rid. Defined broadly consistent with the time that's. In terms. Your earlier question. Whether this as a political economic matters of economic matter. I think the right way to think about it is it's an economic matter which. Very very important political ramifications. And so it was not very surprising it's regrettable but not for surprising. You may Republican. Congress has been dragon to try to do something about this match. ID you know the deficit the debt clock continues to. And moment by moment by moment and I just wonder. Blue wigs and because if Illinois is at the top of the list on a commercial I don't know viewing and some other states in terms of quarter Reyes California or they haven't problems New York is just about every. Think news California is moments funded pension liabilities really quite order for a guy who took the numbers slightly but but it really quite work you're sort. Mr. imposed. There are states. That. That are facing some problem that he could be really good worker question. It is column whether or not it is why is for the federal government strongly and slime that route to. Through disaffected by offering some form of a bankruptcy protection to chapter in time. Two him to Puerto Rico given that its bonds were marketed under the explicit provisions that they were not did not count. An option to seek bankruptcy protection. They found themselves. And enabled computer. To service their doubts. And what's going and in. Congress. One of the latest proposals. Problem. It's changing literally by the pavement. The latest proposal I saw one as the proposals to Harlem. Well bankruptcy protection from Peru Rico while imposing. Some school control board. That would basically take over that he spending and the size of Puerto Rico covenants and impose fiscal discipline. Given the studio. The Commonwealth's political establishment is simply demonstrated itself not be able to do so. He bankruptcy provision I think would be quite perverse it will result in. The creditors. Being forced to kick your pets. Outside of negotiation process which I think actually quite. Quite destructive and that is essentially what happened in Detroit. Which often in his described as sort of the success in terms of dealing with the massive municipal debt. It is repeated that values. These success. Adjective sessions with respect to be torn because quite wrong. Tensions worse. There's basically restorative fool. Creditors got away about ten cents on the dollar there's been no reform of between governance in terms of the number. Government units. In terms of planning and there's been no move planning change doing that the two towards populations on the Teamsters. In the last few tickets. There's been no reform. Them. Undertaken on paper like between government given the what happened to their bankruptcy process I think that calling that success. Really misses some increased fuel Petit to deal I think that's likely to be curious. If Puerto Rico it was allowed access to bankruptcy court to choke line. Thank you sir appreciate your time you took something very complicated. And made it not easy but understandable because s.'s the very complicated thing for most of us perhaps not you thank you. That demands anchor resident scholar at the American Enterprise Institute when we come back. But really more information on this. You talked about perhaps 73 billion. From Puerto Rico. Or at least allowing them to restructure somebody's gonna have to make that up. To the bondholders. That's the United States or not and now we're talking about Illinois. California. New York in where loses and because in the Garland prominent did. She'll on this years ago wearily on election night where Elliott stonecipher told him. Man who has run associated that blow was gonna happen. Is that as the bigger. The states to fall as states of fault it's going to be pushed down. To the county or parish level and against of again eventually to the local. Level and it would appear to see that's what's gone on now and the federal government. Have to be allowed every state the national debt as it stands right now nineteen. Trillion. I guess it is 264000062. 1260. I don't know it's a lot of money 932 Tommy Tucker back in a flash. Under the W well so untimely it is national. Debt clock here of course deficit runs year to year. And dad is common to EO in general. So low in the numbers are changing constantly am just trying to figure out how many numbers they are and what it is. Yeah they're the big thing in Times Square or use keyboard running down Clark Haggans. And thanks to you lost me in the trillion any idea on any other tourist information you'd like to bush Kerry goes Ali I just a place called Joe's ego and you can get nice amateur. He wants. It's in New York with somebody one time. And you've taken hotel. And inside when he when he lets get as a borrow and it's and pizza are you kidding me. If you are in now he thinks capital of the world yes. Anyone goes borrows. Game that's fine Sherwood OK and then you wrong I'd so it is right now at say the 639. On her right hand side okay. Many got a 190 so it's a 190639. Ranked many ads 066. 28 sue. 599 whatever it is so that 066. Would be. Thousand know 10000666. Million is your editorial I don't it is 191000000000264. Billion 66545000. 944 dollars and keeps going up by the minute and we worry about our little 600 million dollar Louisiana problem. Well and that you know I don't know if it is all about bonds or nine and I know Standard and Poor's and he's bond rating companies. Hum. Which it in a lot of ways are paid by the companies to rape them but that's a story for different date perhaps. I know this and every year commercials. It tugboat culling out politicians. And talking about a situation. In. Different it is Stater commonwealth there are spending money went hands you and you're saying don't let this happen. It is usually more complicated than it would appear on the surface and ask who were trying to get to hear as it relates to Puerto Rico. Defaulting on its debts and the United States bailing them out if I'm presenting that's right Dan mutual's senior fellow at the Cato Institute a morning sooner. Undone well thank you for taking the time when this. It isn't all boats. As there as the commonwealth of the United States and I'm I'm quite sure. Who were out of the Commonwealth's do we have do you know. Well states like Kentucky and message is clear commonwealth but but the more relevant thing is order a territory. Territory. So. When he comes C United States' responsibility. In terms of Biehl and somebody download or help him restructures 73 billion dollar bed. Are dead rather they campaign do what is in United States' responsibility and then and why would it be our problem. In theory there's a responsibility. Puerto Rico is supposed to be self governing territory. Dave. And totally agree to the Caribbean. Lot. Reckless government spending and our ports thing that don't have the value taxpayers. And as a result they now have a stagnant economy went to debt beyond there level to repay. Further a couple of options. Washington and stand back and do not think it would create quarter eco what it in the process. Of going it op which meet expecting that aren't older people who have them. And maybe that's the best result it is if you if you let money peer alcoholic. Brother a lot beat gambling problem that he. Should be. Surprise and probably nine. So roses. Spending a kind of bag take a step back this 73 billion. And you said frivolous government spending did do we know where that money went in when it was spent on. Well and it went all over the place but I spoke we can identify who significant problems in particular one. They have paid bloated government workforce. Beckett confrontational way above the average for sport the island. And so when you basically have a large bureaucracy that you overpaid them more and more people want like gravy train. And the politicians keep it promises to be you know the big voting bloc. And so earlier he makes it would promises. There's a late in October. Basically it script a mater Puerto Rico but it's not just a bloated and overpaid government bureaucracy. You want to all these. I guess the technical term as a government sponsored enterprises. They do that mr. Fannie Mae and Freddie Mac but forget about everything in the artery the economy. And a lot of these government sponsored enterprises that independent borrowing authority and they've racked up a lot of debt as well but of course there are racking up debt. Without any rep stream. What's called service that that. In terms of cautionary tale. Analogy one hand you could Puerto Rico in microcosm beat a lot of the states in the United States over the United States itself. It certainly they're very strong analogy with US state. When you see Puerto Rico. There should be alarm bells going up and tiger and Illinois Illinois Illinois beat is Illinois is. Probably even more so in California or New Jersey Illinois is the American state and it's going to do at this park while the suit. And what it. Just like there are no technical bankruptcy procedure for Puerto Rico. They're technically no bankruptcy procedure for Illinois either that we feel that provisions and the US bankruptcy code for local. But there's no provision for states no preparation for territories like Puerto Rico. And so water cooler. Weather outlook or outlook that. But we're gonna learn something Rico's collapsed because sooner or later we're in the same thing in Illinois probably sooner. What part does the fact that Puerto Rico is. Hispanic nation Latino on I don't know what word to use anymore. Dan but. In terms of election year. Hispanic vote being courted in the United States is as say a game changer is as a major player in his decision. Eight player because. You've had luck to Puerto Ricans are US citizens don't forget. They can freely move to the to remain a lot that order can have Bluetooth. Florida Florida is considered a swing state. And so if there's a perception that. Because you're not built a Puerto Rico that must mean your anti Hispanic. Yeah that could play a role depending you know that from politicians champ Cain about these issues. Now of course when it happened Illinois enter Oprah about what our anti. Editing and I used say are you Illini. Like them so I don't think India and it is about race or ethnicity or like that. It sure about a government overspending. Getting profit to addiction than. How do you sort of undo the damage. Can we put you on holding come back and a couple of minutes because on a talk about how do you undo the damage and at some point is has to be main Major Wright to the bondholders I would think. As I mean as he's an earlier the government bail and allowed. And then what do you do with bombed the municipalities or say counties overs we column here parishes. And cities. And does this have anything to do long term with the municipal bond market. And do the ratings they receive or the willingness of the financial community to invest. In them 94416. Before attend Tommy Tucker back in a flash on Devin WL. Tommy dug it out of WL trying to. Educate all of us I guess it is on what's going on in Puerto Rico in the United States and then government when it comes to. From the US Dan what would it what is gonna happen here today is the dangers summoning FDA introduces. In other congaree is has had a chance of passing. Are they cognizant of the fact that this could lead to a dangerous expensive president. Now when it comes other states. Jump in where you feel comfortable on all of that. But there or is legislation in congress and what it basically. Record at the ornery. Will in effect create. ABA knew who part of bankruptcy law. That will allow you to restructure your debt. And by restructuring debt what what you're basically saying as. We're not an honor that commitment we made to the people who had money bond holders are going to lose from the past it. But in exchange for creating this new part of bankruptcy law. You Puerto Rico have to agree to what public financial control or oversight board every wanna Pollack. But that over rape or it will inept. Take over some of the decisions of your economy despite the ways very analogous to so called quite. That has been beaten Greece's fiscal policy issue of this. This board will in effect OK you can government spending growing faster than private sector is that. Recipe for wrote in that we're going to force reform your economy. Work government grows slower than. If you do that. Make that really the key Berry is government growing faster or slower than the private sector if you have a government grows slower than the price that couldn't. Puerto Rico well right fiscal. To the tune of getting a 73 billion dollars back they're paying that off. What what it is that they wouldn't pay back the full retreat dollars you're one of these people let you sort of rolled the die. Watt Puerto Rico government debt. Are you gonna get back. Fifty cent on the dollar thirty cent seventy cents I have no idea you may want to edit only forty cent on the dollar she'll make the prospect. It'd take expected defense and now Arctic beat down on the dollar but ultimately that political negotiation. Give and take. But of course the lobbyists play big roles. Thank you I appreciate your time Dan very complicated stuff I think we understand that a little bit better now. But I appreciate have been chip to be on the program. You bet you have a good day we'll talk to you again. Tommy Tucker it is 951. At LSU graduate. Chris frantic constant. Mrs. trying to cast or mama trying to customs or whomever it is just when I was cleaning them and aids. And valued at 400. Dollars a mom gets the putter heals up. And don't say this down tally in Allen's house cleaner and you never got it don't do. It's going to be but don't tell Auburn that the ideas to make her happy for Mother's Day prank. So if you wanna win a housecleaning from the maids just listen tomorrow when you hear that sound. Of the maids going through their 22 steps systematic cleaning. Procedures today. War. Yesterday the anniversary of getting Osama bin Laden doing. Mainly yesterday at least Sigourney is sunny morning Joe's maybe not. But out of remember that night went when I saw the breaking network coverage that the president asked to address the nation. And about 10 o'clock at night. I knew. That we got bin Laden is there I couldn't think of anything else in the world. Imus god forbid we had been intact announcing he'd vest. For it to happen 45 minutes from when it did the boy talk about Unita is is Americans. Is freedom of speech being threatened to on our college campuses this with the team in Garland around and adds asking next. In every day of course says he has from ten until one on the thing tank. And is to talk about Orleans parish courts have the improved since last year. And finally should Louisiana residents and their rights to shoot down drones. That gets too close to their home. I love this. Louisiana legislature belittle over the disabling of a drone that trespass is on private. Property whose rights mean majority of those who fly drones are citizens. Who may be watched it'd be like yeah. A skeet shooting kind of thing combined with duck seasons along easily you know scattered. Thanks everybody for their calls and text saddle quickly and the Puerto Rico thing for you will be back more morning 6 o'clock Tommy Tucker seven W.