Paul Ryan Teams With Pelosi and Obama to BAIL Out Puerto Rico

The U.S. House of Representatives approved a plan Thursday ostensibly aimed at helping Puerto Rico out of its US$70 billion debt crisis after failed attempts at radically overhauling the structure of the bill.

The measure, which passed the House 297-127 on Thursday, June 9, now heads to the Senate. Texas Sen. John Cornyn, the No. 2 Senate Republican, says that it’s likely that the Senate will take up the House version of the bill if it passes the House.

House Rules Committee to prepare a bill for floor debate that would create a financial control board for Puerto Rico and restructure some of the US territory’s billion debt, in Washington. But it also raised questions about the extent to which the Caribbean island, which has been a USA territory since 1898, has sovereign powers akin to any of the 50 US states.

By contrast, House Minority Leader Nancy Pelosi told her Democratic troops to “pray on it” and vote “yes” Thursday, despite hand-wringing over the control board’s powers and provisions that could slash the minimum wage for young adults on the island. They pay our taxes, they fight in our wars. “We can not allow this to happen”, Ryan said in a floor speech just before the bill passed.

The potential federal intervention is emerging just weeks before Puerto Rico and its agencies must pay $2 billion of principal and interest, including $805 million for general obligations, which Governor Alejandro Garcia Padilla has said the island can not pay. “The best chance creditors have to get what they’re owed is this bill”. PROMESA also strengthens the financial oversight board’s ability to audit Puerto Rico’s government and assist the island with the management of public finances. Failure to pass it, they warned, could put Congress in the hard position of ultimately overseeing a massive bailout of Puerto Rico.

An amendment to the bill offered by Reps.

But lawmakers have been buffeted by an opposition lobbying campaign by some hedge funds, which fear losing part of their investments from oversight board decisions.

The legislation was bolstered by rare bipartisan cooperation between the White House and the House’s Republicans and Democrats over the past six months.

He had to rely on Democratic votes to get it across the finish line, however, as more than 100 Republicans rejected the bill. “Legislation which focus more on better equipping Puerto Rico and the other territories with the mechanisms to grow their own economies rather than imposing Orwellian oversight boards”.

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”.

Following the House vote, the White House in a statement urged the Senate to act promptly “so the president can sign the bill into law ahead of the critical July 1st debt payment deadline”.

Some experts saw the federal government’s argument against treating Puerto Rico as a separate governmental entity as having implications for another issue: how to deal with the territory’s debt crisis. Dick Durbin said. “The people who are endorsing that ignore one obvious fact”.

“If Congress is willing to undermine a territory’s constitutionally guaranteed bonds today, there is every reason to believe it would be willing to undermine a state’s guarantee tomorrow”, said Rep. Tom McClintock, R-Calif.