US lawmakers pass Puerto Rico debt bill

WASHINGTON, DC, USA – The US House of Representatives has passed a bipartisan bill that is to allow Puerto Rico to restructure its $70 billion debt and avoid a massive default next month.

Locked in recession for more than a decade and increasingly unable to service its debt, Puerto Rico is blocked by US law from getting formal bankruptcy protection, which would allow a court to force creditors to write off large amounts of its debt. (READ: US Treasury seeks Congress action on Puerto Rico crisis)

The island, a US territory, already missed several deadlines for payment and risks defaulting on a $2 billion payment due July 1.

The measure, which passed the House 297-127 on Thursday, June 9, now heads to the Senate.

It received support from 139 Republicans and 158 Democrats, a remarkable bipartisan effort during a heated election cycle.

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.

“This bill won’t add a single dollar to the deficit,” the Republican lawmaker said. “This bill actually prevents a bailout. That’s the whole point. But I will tell you this: There very likely will be a bailout, if we don’t pass this bill.”

The White House praised lawmakers for passing the bill, saying it was “not perfect” but an important step in addressing challenges on the island, where some public services have been curtailed.

“Puerto Rico’s path forward to economic growth requires not just the financial tools in this bill to address the immediate debt crisis, but also additional economic tools to grow Puerto Rico’s economy in the long run,” White House press secretary Josh Earnest said in a statement. – Rappler.com 

US lawmakers pass Puerto Rico debt bill