In a breakthrough, House Republicans and Democrats have struck a deal with the White House on a deal to help rescue Puerto Rico from USD 70 billion in debt.
A revised bill introduced late yesterday would create a control board to help manage the US territory's financial obligations and oversee some debt restructuring. The legislation came after weeks of negotiations.
House Speaker Paul Ryan, House Democratic Leader Nancy Pelosi and Treasury Secretary Jacob Lew all expressed support for the legislation today, with Lew calling the bill "a fair, but tough bipartisan compromise."
Ryan, R-Wis., said in a statement today that the legislation would avoid an eventual taxpayer bailout of the US territory.
The plan is "the most responsible solution to the crisis because it gives Puerto Rico a path to real reform while protecting taxpayers," he said.
The House Natural Resources Committee could vote on the bill as early as next week. The committee's chairman, Utah Rep. Rob Bishop, has led the negotiations and worked closely with Ryan, Pelosi and the White House.
Bishop originally introduced a bill last month, but canceled a scheduled committee vote after objections from both parties.
Since then, he has worked closely with Ryan to win over conservatives, who worry it might set a precedent for financially ailing states, and Democrats, who say they are concerned the control board will be too powerful and favorable to creditors.
After opposing previous versions of the legislation, House Democratic leader Nancy Pelosi of California said the new bill "achieved a restructuring process that can work."
Pelosi said she hopes the House will pass the bill quickly. "We cannot shirk our responsibility to our fellow citizens in their hour of need," she said.
The goal is to speed aid before Puerto Rico defaults on a USD 2 billion debt payment due July 1. The island has already missed several smaller payments.
Disagreements over how the board would be appointed held up negotiations over the past week. Under the bill, President Barack Obama would select all but one of the board members from lists provided by congressional leaders. If Obama does not pick from those lists, the members must be confirmed by the Senate.
