House OKs bill to ease Puerto Rico’s debt, Senate up next

The bill would allow the seven-member control board to oversee negotiations with creditors and the courts over reducing some debt. But more than half of Republicans voted for it, joining 158 Democrats.

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.

After the vote, the White House urged the Senate to follow the House’s lead quickly.

Duffy said, “Two sides of the political isle have come together, at the start from very different vantage points on how to help Puerto Rico, but have consistently worked together to find a compromise that all of us think is going to leave Puerto Rico better off than it is today”.

A Puerto Rican flag hangs from the balcony of a house in San Juan, Puerto Rico, on May 1.

Still, some lawmakers were concerned that allowing Puerto Rico to restructure its debt in a way that changes the seniority of the creditors – for instance by making them all equal or subordinated to pensioners – would set a bad precedent for other US states with debt problems, according to the report.

Puerto Rico Gov. Alejandro Garcia Padilla said Thursday that he didn’t like the plan, but it is the least harmful alternative for Puerto Rico. “Even the [Congressional Budget Office] said it’s zero cost”. Indeed, without PROMESA, taxpayers will inevitably be forced to bailout Puerto Rico in the near future. Dick Durbin said. “The people who are endorsing that ignore one obvious fact. It’s been speculated that these are Wall Street hedge fund investors that bought Puerto Rico bonds at 40 cents on the dollar” and want Congress to help them more than double their money, he added. The bill now heads to the Senate, where lawmakers appear lukewarm about the measure.

“The House bill provides a solid basis for moving forward and we must move forward”, Sen.

Democrats and labor unions also have opposed a provision in the bill that would allow the Puerto Rican government to temporarily lower the minimum wage for some younger workers. “The bill helps to protect the 3.5 million Americans living in Puerto Rico from further reductions in critical public services while giving Puerto Rico the tools it need to restructure its debt”.

Some of those conservatives did vote against the legislation, expressing concern for the bondholders and saying it could set a precedent for financially strapped states.