As the default date for Puerto Rico looms closer the Senate, expects to begin voting on the rescue package for the debt-stricken island. Puerto Rico is expected to default on its’ $2 billion debt payment. The bill has had bi-partisan opposition, but party leaders have endorsed it and promised to complete it before the July 1 deadline.
“Failure is really not an option,” Majority Leader Mitch McConnell, R-Ky., told reporters after meeting with his GOP caucus Tuesday.
Puerto Rico is in a decade-long recession and has $70 billion in debt. The bill, passed by the House earlier this month, would create a control board that would oversee the island’s finances and could supervise some debt restructuring. It would also require the territory to create a fiscal plan and fund public pensions, which the government has shorted by more than $40 billion.
Treasury Secretary Jacob Lew made a last-minute visit to Capitol Hill Tuesday in a bid to persuade some undecided Democrats. Lew urged senators to vote for it Wednesday even though it isn’t perfect. Like Lew, Puerto Rican Gov. Alejandro Garcia Padilla made a last-minute visit to Capitol Hill to lobby for votes. “It’s not perfect, but we need it,” Garcia said between visits with senators.
“The fact that this works and it gives Puerto Rico the ability to move forward is just an overwhelming reason to pass this in a timeframe that prevents the descent into chaos,” Lew said.
Senate Minority Leader Harry Reid, D-Nev., said he would vote for the legislation, though he criticized McConnell for not allowing amendments to the bill. The House is out of session until July 5, so the Senate will have to pass the House bill unchanged for it to head to the president’s desk for his signature before the Friday deadline.
Sen. Richard Blumenthal, D-Conn., said he was supporting the legislation and warned of the consequences if the Senate doesn’t act: “If it’s just rejected, there’s no clear path,” he said.
Some senator stand in strong opposition such as Democratic Sen. Bob Menendez of New Jersey who monopolized the Senate floor for more than four hours Tuesday evening, arguing that the bill adopts a colonial approach to the territory, which is home to 3.5 million United States citizens. He said ordinary Puerto Ricans get little say and the package favors hedge-fund creditors over island pensioners.
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