House passes bill to help ease Puerto Rico’s debt

WASHINGTON – The House on Thursday overwhelmingly passed a rescue package for debt-stricken Puerto Rico, clearing a major hurdle in the ongoing effort to bring relief to the U.S. territory of 3.5 million Americans.

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 now heads to the Senate, just three weeks before the territory must make a $2 billion payment.

In a rare display of political unity, the bill had the 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 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.

Puerto Rico Gov. Alejandro Garcia Padilla said Thursday he didn’t like the plan but it is the least harmful alternative. “This will protect us from the chaos that will result from an inevitable default that looms on July 1,” he said.

The White House said just after the vote that the Senate should act quickly.

“We urge leaders in both parties to build on today’s bipartisan momentum and help Puerto Rico move toward lasting economic prosperity,” said White House spokesman Josh Earnest.

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

Puerto Rico has missed several payments to creditors. A lengthy recession has forced businesses to close, driven up the unemployment rate and sparked an exodus of hundreds of thousands of people to the U.S. mainland. Some schools on the island lack proper electricity and some hospitals have said they can’t provide adequate drugs or care.

“It is regrettable we have reached this point, but it is reality,” said Pedro Pierluisi, Puerto Rico’s representative in Congress.