The bill known as PROMESA, the Spanish word for “promise”, passed the House with a vote of 297 to 127.
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H.R. 5278, termed the Puerto Rico Oversight, Management and Economic Stability Act or PROMESA (the Spanish word for “promise”), would create a financial oversight board with the authority to restructure some of the USA territory’s $70 billion debt.
After Puerto Rico missed a debt payment on May 2, the White House called on Congress to step in and help the USA territory avoid financial disaster.
The raging debate in Puerto Rico was reflected in the gubernatorial primary elections held there Sunday, in which Pedro Pierluisi, the island’s nonvoting House representative who supports PROMESA, lost to Ricardo Rosselló Nevares, an outspoken opponent of the bill, in his bid for the New Progressive Party nomination.
“Now the island is shutting down”, Ryan said, with “closed schools; hospitals are beginning to close, that’s today”.
But some lawmakers remain critical, and Democrats may seek further reforms in the Senate, according to Reuters.
But Mr. Motta said the U.S. Department of Treasury, which has been pushing to have all U.S. territories included in the P.R. debt bill, agrees with Thomas Charles MacArthur, a New Jersey Republican Congressman and the original sponsor of the amendment, and Ms. Plaskett – who along with Mr. MacArthur and others worked with Treasury for the past two weeks to reach common ground – that even if the bill were to be challenged in its current form excluding the U.S.V.I. and smaller U.S. territories, it remains highly unlikely that the lawsuits would prevail.
Democratic presidential candidate Bernie Sanders, I-Vt., said the rescue package would “make a awful situation even worse”. He has introduced his own bill to help the territory.
Locked in recession for more than a decade and increasingly unable to service its debt, Puerto Rico is blocked by U.S. law from getting formal bankruptcy protection, which would allow a court to force creditors to write off large amounts of its debt.
The U.S. House of Representatives has overwhelmingly passed a bill to help Puerto Rico dig out of its financial mess.
Sen. Bernard Sanders, Vermont independent who is facing pressure to end his Democratic presidential bid, has urged his colleagues to reject the bill, saying the island’s residents would suffer more than the banks who loaned to the debt-addled territory.
House Speaker Paul Ryan lobbied vigorously for the bill, which establishes a committee to negotiate with Puerto Rico’s creditors and does not involve financial assistance.
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.
Ahead of the vote, Republicans said they had enough support from both parties for passage. “We can not allow this to happen”, Ryan said in a floor speech just before the bill passed. Now it’s up to the Senate to clear the legislation and send it to the White House for President Obama’s near-certain signature. That would set a bad precedent for states that over-extend themselves and seek help, they say. Rep. Rick Crawford, also a Republican, voted against it.
He said, “I would love if we could say, ‘The Puerto Rican government, you guys have to do a better job of managing your debt.’ Guess what?” Purchasers of Puerto Rican government bonds do not pay federal, state or local taxes, which led investors to snatch them up anytime the island offered them.
“Absent this bill”, he said, “almost nobody wins and nearly everybody loses”.
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The White House said just after the vote that the Senate should act quickly.
