House Unveils Bill To Help Puerto Rico Deal With Its Debt Crisis

Hopefully the third draft will do the trick.

WASHINGTON -- After months of negotiations, and fits and starts, House Republicans have unveiled revised legislation to help Puerto Rico tackle its $70 billion debt. 

The bill, released just before midnight on Wednesday, is the third attempt by lawmakers to aid the commonwealth, which is home to 3.5 million Americans. Its underlying text is primarily unchanged, but is now language the Treasury Department appears ready to support. If passed, it would establish an oversight board to guide Puerto Rico's government through the restructuring of its debt -- a power the island doesn't have unless afforded to it by Congress. 

In a move unwelcome by Democrats, the bill also exempts the commonwealth from new overtime protection rules issued by the administration, and keeps the minimum wage below the national standard for a period no greater than five years.

Puerto Rico defaulted on a roughly $400 million debt payment on May 1, and if the House bill doesn't reach the president's desk before July 1, the commonwealth will default on a massive $2 billion payment.

"Republicans and Democrats came together to fulfill Congress’s constitutional and fiscal responsibility to address the crisis," House Speaker Paul Ryan (R-Wis.) said in a statement Thursday. Pushing back against opponents who have characterized the bill as a "bailout," Ryan added that it "gives Puerto Rico a path to real reform while protecting taxpayers."

Rep. Rob Bishop (R-Utah), chair of the House Natural Resources Committee, said from this point forward all changes will be made in public committees. It remains unclear when Bishop will schedule a markup in his committee.

While the focus of the legislation remains the same, there were slight changes to the authority given to the oversight board. The bill boosts the board's power to force the sale of government assets and consolidate agencies and workforce. The revisions also use stronger language to affirm that the legislation "holds supremacy" over any law in the commonwealth. The board has greater leeway to hold hearings, issue subpoenas and impose criminal penalties when seeking information on financial statements from the government at all levels. 

In a concession to Democrats, the bill removed the land transfer of 3,100 acres of the Vieques National Wildlife Refuge to the Puerto Rican government from the Interior Department. Environmentalists and the administration were concerned that the commonwealth didn't have the money to maintain the refuge, and that it could potentially be opened up to private development.

Democrats didn't get everything they wanted, though. 

In a statement issued Thursday, House Minority Leader Nancy Pelosi (D-Calif.) called the overtime and minimum wage provisions "extraneous" and harmful to working families. Still, Pelosi's comments suggest Democrats will support the bill.

"We believe we have achieved a restructuring process that can work," she said.

Rep. Raul Grijalva (D-Ariz.), ranking member on the Natural Resources Committee, too expressed cautious optimism.

"This is not the bill I would write and we are well aware that an oversight board will never be the first choice of many in Puerto Rico," Grijalva said. "This legislation is a compromise."

Despite trepidation, Democrats are signaling they will vote for the bill. But one major question is whether conservatives within Republican ranks will fall in line behind their speaker. Very few were happy with earlier versions of the bill, and have yet to weigh in on the latest version.

Treasury Secretary Jack Lew praised the bill as a "positive step in the right direction."

"Congress must stand firm and resist calls from financial interests to undermine this effort every step of the way – in committee, on the House floor and in the Senate," Lew said. "Only bipartisan congressional action can end this escalating crisis in Puerto Rico, and we encourage lawmakers to act without delay.”

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