Puerto Rican officials plead with Senate to pass debt relief

Top Treasury Department and Puerto Rican officials are begging the Senate to move quickly on a bill to help the commonwealth handle more than $70 billion in unpayable debt.

Funding for public services in Puerto Rico is drying up under the commonwealth’s shrinking economy and lack of access to credit markets, so leaders are pushing the Senate to clear a House-passed bill before a crucial debt payment that is due July 1.

{mosads}“We need the bill by July 1,” Puerto Rico Gov. Alejandro García Padilla (D) said during a Thursday panel hosted by the progressive Center for American Progress Action Fund. “We need the bill yesterday.”

Senate Majority Leader Mitch McConnell (R-Ky.) is expected to hold a vote on the debt measure next week before the chamber leaves town for its July 4 recess. 

The bill passed the House this month with wide bipartisan support and is expected to clear the Senate, though Democrats have refused to publicly support the legislation.

Treasury Secretary Jack Lew met with Senate Democrats on Tuesday, insisting that Puerto Rico couldn’t wait any longer for relief.

“It’s not a crisis of the future. It’s a crisis of the moment,” Lew told reporters after the Tuesday meeting.

Antonio Weiss, Lew’s special counsel, said Thursday that “there’s no foundation to build upon” in Puerto Rico without the bill’s passage.

“We are safeguarding the economy. We are safeguarding the people of Puerto Rico,” said Weiss during the Thursday panel, where he was we joined by García Padilla and Resident Commissioner Pedro Pierluisi (D), Puerto Rico’s nonvoting member of Congress.

“No one will invest in Puerto Rico until this crisis is solved,” Weiss said.

The bill would establish a seven-person oversight board charged with restructuring Puerto Rico’s debt. Until that happens, Puerto Rico risks spiraling into deeper debt, lacking enough money to fund essential government services.

“We don’t have the money for the payroll, the medical system and the healthcare system and to pay our debts,” García Padilla said. “If I shut down the government on July 1, I still don’t have enough money to pay.”

Democrats have spoken out against oversight board’s expansive power over the Puerto Rican government and a provision affecting the minimum wage for young Puerto Rican workers.

Pierluisi tamped down on those concerns and insisted the provision that allows Puerto Rico’s governor to lower the minimum wage for young workers would never be enforced.

“This is becoming a messaging type provision but it’s meaningless,” Pierluisi said.

Passing the bill before July 1 won’t suddenly solve Puerto Rico’s problems, since the oversight board would still need to be appointed, approved and established.

But doing so before the deadline imposes an immediate stay on lawsuits against Puerto Rican creditors and tamps down on uncertainty about the path ahead.

“This is a sound approach and has all the tools the commonwealth needs to get out of a crisis,” Weiss said.