The overwhelming, bipartisan 297-127 vote in favor of the bill was a victory for Ryan, who had urged his colleagues, especially reluctant conservatives in the GOP caucus, to back the bill. John Cornyn of Texas, the No. 2 Senate Republican, said it’s likely that the Senate will now take up the House version of the bill.
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There would be a stay on litigation as the control board gets an opportunity to oversee negotiations between creditors and the Puerto Rican government over settling terms of the debt.
The territory, which has a 45 percent poverty rate amid high unemployment, is also plagued by a growing migration of residents to the US mainland.
House Speaker Paul Ryan, R-Wis., will need significant support from his own caucus as well as most Democrats to get the bill passed.
But critics say that one of those “other laws” includes legislation signed in April by Puerto Rico Governor Alejandro García Padilla to default on a $422 million payment and a Puerto Rican regulatory board decision that could repudiate the debt as illegally issued.
The control board would “cast aside bondholder contracts and retroactively subvert them to Puerto Rico’s government pension system at its sole discretion”, a group called Main Street Bondholders said in a release this week. “We can not allow this to happen”, Ryan said in imploring lawmakers, especially reluctant conservatives in the GOP caucus, to back the bill during debate. The measure heads to the Senate just three weeks before the territory must make a $2 billion payment.
Debate over the Caribbean island’s sovereignty has recently been overshadowed by a debt crisis that has engulfed the USA territory, underscoring its complicated relationship with the mainland.
On Tuesday, Aeromed, the island’s only active air ambulance company, announced it was suspending its services, blaming the large government debt.
Reps. Raúl Labrador (R-Idaho), an influential House conservative, voted for the measure, which was a signal to other conservatives that they could support it.
In a statement hours before the vote, the White House saysfailing to act could result in an “economic and humanitarian crisis”.
Plaskett said that the language connecting the other territories to the bill could have had a negative economic impact on the Virgin Islands. The question here was whether Puerto Rico’s government had the distinct power to prosecute a person for a crime at the same time the federal government does-a power states have.
Puerto Rico has missed several payments to creditors and faces the $2 billion installment on July 1.
“This bill won’t add a single dollar to the deficit”, the Republican lawmaker said. Franklin California Tax-Free Trust decision have implications on the island’s massive humanitarian and debt crisis, especially with regards to the bill now being considered in Congress as a way to resolve those crises.
Some Republicans strongly opposed the bill, expressing concern that it could set a precedent for financially strapped states. Young Puerto Ricans will have much lower minimum-wage protections than people in the states, and Puerto Rico will continue to receive some federal funding at much lower relative percentages than states.
But more than half of Republicans voted for it, joining 158 Democrats.
Kagan wrote that since the United States took possession of Puerto Rico from Spain in 1898, Congress has had control over the island’s political and administrative affairs.
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If Congress is willing to undermine a USA territory’s constitutionally guaranteed bonds today, there is a higher risk that Congress would be willing to undermine constitutional debt guarantees for grossly insolvent states like IL and California in the future.
