Senate Democrats have unveiled legislation to alleviate Puerto Rico’s debt woes, urging that the island be allowed to declare bankruptcy on all of its debt, The Hill reported today. The bill released yesterday would allow the U.S. territory to restructure its $72 billion in outstanding debt and create a fiscal oversight board for the island. “Congress has to act immediately to fix the federal funding shortfalls and give Puerto Rico the tools it needs to fully restructure its debt,” said Sen. Bob Menendez (D-N.J.), one of the bill’s sponsors. The other Democratic sponsors of the bill are Sens. Sherrod Brown (Ohio), the top Democrat on the Banking Committee; Maria Cantwell (Wash.), the ranking member of the Energy and Natural Resources Committee; and Sen. Richard Blumenthal (Conn.). The measure is likely to be opposed by Republicans, who have been reluctant to let Puerto Rico declare bankruptcy on large amounts of its debt. Investment firms with significant holdings in Puerto Rican debt are also likely to make their displeasure known. At the same time, House Republicans are trying to craft their own bill to address the debt crisis before a March 31 deadline set by Speaker Paul Ryan (R-Wis.). Time is of the essence for Congress; Puerto Rico is expected to default on some of its legally owed payments as early as May. Read more.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
