Ryan argued on the House floor Thursday that Puerto Rico needed congressional assistance because, unlike every USA state, Puerto Rico is not legally allowed to file for bankruptcy to restructure its debt.
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By a vote of 297-127, the House approved the bill, sending it to the Senate for consideration.
The Obama administration made a last-ditch effort to convince Democrats this week, inviting Gutierrez and other influential Democratic lawmakers to the White House for a Tuesday meeting with President Obama and Treasury Secretary Jacob Lew.
“As it stands, this bill offers the ability for the island to restructure 100 percent of its debt, while the only other option would force Puerto Rico to litigate with creditors and their lawyers in court”.
On July 1, Puerto Rico faces a debt payment of $2 billion, including $800 million to general obligation bondholders.
Following months of internal wrangling, the U.S. House of Representatives, Thursday passed legislation creating a federal control board to help Puerto Rico cope with crippling debt that is wreaking havoc throughout the island’s economy.
As The Hill reports, the crisis has been fueled by “years of economic decline and an exodus of Puerto Ricans to the USA mainland, leaving the island with a shrinking pile of revenues”.
News of the bill comes as Puerto Rico has a 45 percent poverty rate amid high unemployment, and is plagued by a growing migration of residents to the USA mainland, Reuters notes. Indeed, without PROMESA, taxpayers will inevitably be forced to bailout Puerto Rico in the near future.
“If you were running for governor of Puerto Rico, you would bad-mouth PROMESA”, he said. Schools lack electricity and some hospitals have said they can’t provide adequate drugs or care.
In a rare display of political unity, the bill had the support of President Barack Obama, House Speaker Paul Ryan, R-Wis., and Minority Leader Nancy Pelosi, D-Calif.
“The oversight board is too powerful and is yet another infringement on the sovereignty of the people of Puerto Rico and they are right to find it offensive”, Grijalva said. “This bill actually prevents a bailout”.
The bill passed with bipartisan support in the House. “All the House really voted on today was to create a stay of time to create an oversight board to create a new review of how to restructure the debt”.
The White House issued a statement Thursday strongly backing the bill in spite the inclusion of provisions – including a potential suspension of the minimum wage and overtime rules – that Democrats largely oppose: “Failing to act now will result in an economic and humanitarian crisis far beyond what Puerto Rico is already facing today”.
Senate leaders will now consider the bill and have indicated they hope to pass a version before July 1. House leadership pushed back, and appeared to win over enough of their members to get the bill across the finish line. “I understand the very hard choice facing the People of Puerto Rico and my colleagues who voted in favor of PROMESA”.
“It is regrettable we have reached this point, but it is reality”, said Pedro Pierluisi, Puerto Rico’s representative in Congress.
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Westerman said he doesn’t know who is paying for the ad campaign.
