U.S. lawmakers yesterday backed a plan to help Puerto Rico escape crippling debt and expand the economy, a move that could put a rescue before the House of Representatives within days, Reuters reported. The House Natural Resources Committee endorsed the plan by a 29-10 vote and left intact most provisions endorsed by House Speaker Paul Ryan. The plan would empower a federal oversight board to negotiate with investors and decide what they would recover from the roughly $70 billion they lent the island. Taxpayer money will not be spent in the rescue which would prevent a bailout, Ryan's office said in a statement yesterday. Puerto Rico's Governor, Alejandro García Padilla praised the bill for elements to help address insolvency, protect essential services and grow the economy. However, he reiterated reservations about the broad power of the oversight board. Under the plan, investors may not sue Puerto Rico while the oversight board does its work, and all the island's creditors could face a loss despite recent lobbying from Wall Street interest groups. With the House and Senate set to begin a week-long Memorial Day holiday break at the end of this week, debate of the bill by the full House is not expected until sometime in June. Read more.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
