House Passes Legislation To Help Puerto Rico Restructure Its $70 Billion In Debt

The bill was a compromise between Republicans concerned it was a "bailout" and Democrats who wanted it to contain more progressive economic provisions.
House Speaker Paul Ryan (R-Wis.) helped usher legislation through the House to establish an oversight board to work with
House Speaker Paul Ryan (R-Wis.) helped usher legislation through the House to establish an oversight board to work with the Puerto Rican government on restructuring its debt and recovering economically.

WASHINGTON -- Legislation that would give Puerto Rico the power to restructure its $70 billion in debt cleared the U.S. House of Representatives on Thursday.

It’s not the bill anyone wanted, especially Democrats, but with the commonwealth facing a massive $2 billion debt payment on July 1, both parties rallied behind it in a 297-127 vote.

The bill, which establishes an oversight board to work with the government of Puerto Rico in restructuring its debt and crafting an economic recovery plan, will now head to the Senate. Puerto Rico is struggling to keep afloat as the exodus from the island has reached record numbers, and the health care and education systems continue to crumble as a result of the economic crisis brought on by the crippling debt. 

Passage came after months of haggling between Republicans, Democrats and the administration, with everyone finally reaching a consensus after three drafts of the bill. It's a win for House Speaker Paul Ryan (R-Wis.), who had to go back and forth with conservative members wary the legislation would provide a “bailout” for the island -- which is home to 3.5 million Americans. 

Making a final push ahead of the vote Thursday, Ryan dismissed claims that the bill would give the island bailout powers, calling it "absolutely, undeniably, categorically false."

"Puerto Rico is in trouble and we need to act now," he said. "If we do nothing it could be a manmade humanitarian disaster."

A number of conservatives in Republican ranks opposed the bill, worried that it would set a dangerous precedent and cost taxpayers. House leadership pushed back, and appeared to win over enough of their members to get the bill across the finish line.

A handful of progressives in both chambers haven’t warmed to the bill either, but passage came as no surprise as House Minority Leader Nancy Pelosi (D-Calif.) and other Democratic leaders in the House indicated support for the legislation early on. Thursday's passage was a win for Pelosi as well as Democrats carried the vote with 158 backing the bill compared to Republicans' 139.

Pelosi said that the bill “represents a compromise” and she will make sure those appointed to the oversight board understand the importance of voting for restructuring. Democrats wanted to include provisions that would have protected pensions for Puerto Rican retirees in the debt restructuring, and one raising the island's minimum wage, among others. In a concession to Democrats, Republicans removed a provision from the bill that would have approved the land transfer of 3,100 acres of the Vieques National Wildlife Refuge from the Interior Department to the Puerto Rican government. 

The control board, however, is the biggest point of contention for progressives and lawmakers in the commonwealth, who argue it gives too much power to Republicans, who are able to appoint four of the seven that will sit on it. 

"The reality is the urgency in Puerto Rico, the humanitarian needs on the island make us look at this bill not with an eye toward perfection but with an eye toward what is doable," Rep. Raul Grijalva (D-Ariz.) said on the House floor ahead of the vote. 

Pelosi and Grijalva thanked Rep. Pedro Pierluisi -- who represents the commonwealth but does not get a vote in Congress -- and Reps. Nydia Velázquez (D-N.Y.) and Jose Serrano (D-N.Y.). All three were key in convincing the Democratic caucus that the legislation was one they should back.

"The difficulties facing the island are substantial and the blame for them can be spread from San Juan to Washington, DC to Wall Street," Velazquez said in a statement issued hours before the vote. "But for me, in the present and as a proud Puerto Rican, I cannot sit by and do nothing.  I cannot hide behind alternatives that do not exist."