Republicans have delayed the release of much-anticipated legislation they've been working on to deal with Puerto Rico's debt crisis, but a Republican aide says it could be introduced Thursday.
The expectation was that the bill dealing with Puerto Rico's at least $72 billion debt would be unveiled Wednesday by Republican Rep. Rob Bishop, a Utah Republican who is chairman of the House Natural Resources Committee. The committee has been negotiating the bill, hoping for bipartisan support, with several groups representing debt holders, Puerto Rico, the federal government and more.
A committee aide to Bishop said "we are still working through technical stuff, minor refinements."
The committee's ranking member Raúl M. Grijalva, D-Ariz., was in Puerto Rico Wednesday to get an in-person view of how the island's fiscal crisis has been affecting it and its people.
“We are making progress, but we are not there yet," Grijalva said about the legislation. "The situation in Puerto Rico is dire, but a bill that doesn’t solve the problem, or doesn’t pass, won’t help anyone,” Grijalva said.
Puerto Rico, a U.S. territory, has been laying off government and health workers, experiencing skyrocketing joblessness and witnessing an exodus of hundreds of thousands of its residents to the mainland as its fiscal crisis has worsened. It defaulted on $422 million in debt payments on May 2 and is facing another large debt payment in July.
The aide to Bishop said the bill that the committee hopes to introduce would create a financial oversight board that would work to return the island to solvency and help it regain access to capital markets.
The board's mandate would be to bring revenue in line with expenditures and work to find efficiencies, create a fiscal plan with a budget and financial audits. The board would have a large amount of authority for creating the fiscal plan, he said.
"Without a path to regain access to capital markets, you can't create a new foundation for the Puerto Rican economy," the aide said.
At the bill's core, he said, is is preserving and protecting the existing creditor hierarchy. Who gets paid and in what order has been a sticking point in resolving Puerto Rico's debt crisis as creditors have jostled to get as much of their money they invested or are owed as soon as possible.
General obligation debt has priority over everything, including expenditures and pensions, the aide said. He added that in addition to the $72 billion debt, there is $40 billion in pension debt because pension accounts have been "raided."
There has been a push to prioritize pensioners. The aide said the hierarchy plan seeks to respect existing priorities so Puerto Rico can gain access to capital markets but so there is no endorsement of a pension system that has been "raided." "But we do want to protect existing retirees," he said.
The bill allows for land transfers to the Puerto Rican government but a change to previous language ensures that the island of Vieques will be used for conservation and recreation.