SAN JUAN, Puerto Rico (AP) -- Puerto Rico's governor said Tuesday that the U.S. Treasury Department has cut a $4.7 billion disaster relief loan available to the U.S. territory by more than half, and he demanded help from Congress.
Gov. Ricardo Rossello said federal officials reduced the amount to $2 billion without providing an explanation nearly five months after Congress approved the loan. He warned the move puts Puerto Rico in a "dangerous financial dilemma" and that his administration could be forced to cut some essential services as the island continues to struggle after Hurricane Maria.
"Any material interruption to Puerto Rico's public services will only exacerbate outmigration of its population to the mainland and further deepen and prolong Puerto Rico's decade-old fiscal and economic crisis," he said.
Tens of thousands of Puerto Ricans fled to the U.S. mainland after the Category 4 storm, which hit as the island was struggling to restructure a portion of its $73 billion public debt load amid an 11-year recession.
Rossello said it seems the Treasury imposed certain loan restrictions to make it "extremely difficult for Puerto Rico to access these funds when it needs federal assistance the most." He also said Treasury officials told his administration last week that they do not intend to forgive the loan.
Congress had approved the loan in October to help Puerto Rico recover from the storm, which killed dozens of people and caused up to an estimated $94 billion in damage. Some 15 percent of power customers remain in the dark, and more than 700 families are still living in hotels across the island. Last week, Puerto Rico's power company obtained a $300 million emergency loan that will help keep it operating only through late March, according to a federal control board overseeing the island's finances. The board said it plans to request more loans in upcoming weeks.
It is unclear why the $4.7 billion federal loan was reduced.
The Treasury said late Tuesday that it discussed with federal officials and board members on Monday the terms and conditions under which the loans will be offered "to protect federal taxpayer investments while ensuring funding is available quickly when needed."
It said Puerto Rico will be able to access funding quickly if its cash balance drops below $800 million, and that FEMA expects to soon loan up to $5 million per municipality.
In January, officials with the Treasury Department and the Federal Emergency Management Agency sent Puerto Rico officials a letter stating they were temporarily withholding the loan because they did not believe the government was facing a cash shortage as it had previously warned. Federal officials said the money would be released via the Community Disaster Loan Program once the island's central cash balance decreased to a certain level.
Rossello said talks with Treasury officials are ongoing even as he has asked Congress to intervene.