House passes bill to help Puerto Rico stay financially afloat

With Puerto Rico facing a $2 billion debt payment in just over three weeks, lawmakers in the U.S. House of Representatives passed legislation on Thursday to ease the island’s crippling financial crisis.

The strong bipartisan vote was 297-127 for the legislation that would create a financial control board and allow restructuring of some of Puerto Rico's $70 billion debt. The measure heads to the Senate just three weeks before the territory must make a $2 billion payment.

In a rare display of bipartisanship, the bill had the strong support of President Barack Obama, House Speaker Paul Ryan, R-Wis., and Minority Leader Nancy Pelosi, D-Calif.

"The Puerto Rican people are our fellow Americans. They pay our taxes, they fight in our wars. We cannot allow this to happen," Ryan said in imploring lawmakers, especially reluctant conservatives in the GOP caucus, to back the bill during debate.

The legislation would allow the seven-member control board to oversee negotiations with creditors and the courts over reducing some debt. It does not provide any taxpayer funds to reduce that debt.

It would also require the territory to create a fiscal plan. Among other requirements, the plan would have to provide "adequate" funds for public pensions, which the government has underfunded by more than $40 billion.

Hours before the vote, the White House strongly endorsed the bill, saying that failing to act could result in an "economic and humanitarian crisis" in the U.S. territory beyond what the island is already facing.

Puerto Rico's representative in Congress, Pedro Pierluisi, is supported the bill despite opposition from other lawmakers on the island.

"He made absolutely clear that there is no 'Plan B' here," Pierluisi said of Obama.

Puerto Rico, which has struggled to overcome a lengthy recession, has missed several payments to creditors and faces the $2 billion installment on July 1. The economic crisis has forced businesses to close, driven up the employment rate and sparked an exodus of hundreds of thousands of people to the U.S. mainland. Schools lack electricity and some hospitals have said they can't provide adequate drugs or care. The island's only active air ambulance company announced Tuesday that it has suspended its services.

The escalation of the crisis in the U.S. territory paired with July 1 deadline has led some lawmakers to sign up in support of the bill even though they don’t agree with many parts of it.

“Politically, we are at a point where Republicans and Democrats negotiators have agreed on this bill,” Rep. José Serrano, (D-NY), said in a statement. “In a Republican-led Congress, this compromise legislation is the only one with a possibility of getting to the president’s desk. There is no realistic alternative. “

Unions had  lobbied against the legislation because of a provision that would allow the Puerto Rican government to temporarily lower the minimum wage for some younger workers.

Rep. Sean Duffy of Wisconsin, a Republican who sponsored the bill, fought back against the idea that the legislation is a bailout of any sort.

"The bottom line is, this bill doesn't spend any taxpayer money bailing anybody out," Duffy said.

The Senate has not yet acted, but senators said this week that they are watching the House vote. 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.

Based on reporting by the Associated Press.

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