The Senate passed a Puerto Rico debt bill 68-30, placing federally appointed officials in charge of the island’s finances Wednesday – just ahead of the territory’s $2 billion payment due July 1.
Puerto Rico currently faces a $72 billion debt burden it says it can’t repay, which Secretary of the Treasury Jack Lew warned had the potential to turn into a full-blown humanitarian crisis.
In addition to putting a control board in place, the measure puts a retroactive stay on any litigation until the commonwealth gets its fiscal books in order.
While there was some hesitation expressed from members on both sides of the aisle – Democrats are upset over language giving the Puerto Rico government the authority to lower the minimum wage for young people and exempting it from the administration’s new overtime rule, and Republicans are voicing concerns it would set a bad precedent for other territories in the future and wouldn’t fix the problem long-term – leadership from both parties said, while not perfect, it was the best option they had to deal with the island’s fiscal woes.
Senate Majority Leader Mitch McConnell praised the bill for giving the island what it needs to restructure without a bailout – a comment echoed by House Speaker Paul Ryan.
“I am pleased that the Senate has passed PROMESA, the result of months of work by the House,” Ryan said in a statement. “This bipartisan legislation addresses the fiscal crisis in Puerto Rico while protecting American taxpayers from a bailout of the territory.”
Lew praised Congress for coming together on the measure, adding there is still work to be done to get the island back to a state of fiscal solvency.
“With legislation in place, Puerto Rico will now have time to work out an orderly financial path forward after July 1,” he said in a statement. “Putting Puerto Rico back on a path of sustained economic growth will take continued attention and commitment from all stakeholders.”
The bill overwhelmingly passed in the House earlier this month.
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