Treasury Secretary Jack Lew says that Puerto Rico legislation pending in the House is the only viable way to help the island overcome a massive debt burden.
In an op-ed published in the New York Daily News, Lew made a pragmatic pitch for the legislation, amid some grumbling on the left and the right about the package.
{mosads}Lew said the administration does not agree with every word of the bill, which is set to receive a House vote in early June, but argued it is the only path forward.
“It would be a mistake to think that there is a better alternative that will help Puerto Rico and also gain the necessary bipartisan support, or that Puerto Rico’s looming crisis can be averted through other means,” he wrote. “Without this legislation, Puerto Rico will go through a chaotic unwinding.”
The U.S. territory is unable to pay back the roughly $70 billion it owes creditors, and has struggled to maintain basic government services amid an economic decline and dwindling tax revenue. Legislation crafted in the House would allow the island to restructure its debt, and also impose an outside control board to steer the island’s finances back to health.
The Treasury secretary said the House bill is “workable and comprehensive,” and sought to shoot down some lingering concerns from the left about the package. The placement of the editorial in the New York Daily News also ensures it will reach the largest group of Puerto Ricans living on the American mainland. Several New York Democrats, including Reps. Jose Serrano and Nydia Velazquez, have been closely monitoring the bill and pushing for changes.
Democrats failed to include language protecting Puerto Rican pensions in any restructuring, but Lew said island pensioners now have zero protection. Under the bill, at least all creditors, including pensioners, would be on the table for a potential restructuring.
He also pushed back against claims that the outside control board would effectively override any elected officials on the island. While the board will be filled with individuals selected by congressional leaders and the White House, at least one member must be from Puerto Rico.
“The administration is committed to working with congressional leaders to set politics aside and nominate an independent group of experts to serve on the board,” he wrote. “But it is also critical that the board represent the interests of Puerto Rico, and we are committed to making sure that happens.”
Lew, who traveled to Puerto Rico in May, said the territory is facing a crisis that threatens the health and safety of the island’s 3.5 million residents.
“This is not a crisis of the future — it is a crisis that is already upon us, and we must act now to address it before it is too late,” he said.
The island faces a July 1 deadline on $2 billion in debt payments, which it will not be able to pay. Lew pushed for quick action, saying failing to act on a bill before that deadline could throw the island into a legal mess as creditors go to court.