Congress Agrees On Plan To Help Puerto Rico Restructure $70 Billion Debt
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After months of discussion, Congress and the White House have agreed on a deal to help Puerto Rico repay its debt - more than $70 billion of it. The plan sets up a control board that will restructure debt payments and oversee the island's finances. NPR's Greg Allen reports.
GREG ALLEN, BYLINE: It's been nearly a year since Puerto Rico's Governor Alejandro Garcia Padilla sent shockwaves through Washington and Wall Street by announcing the U.S. territory was unable to pay its debts. Since the beginning of the year, House Speaker Paul Ryan promised Congress would act to help Puerto Rico, but as a bill was being developed, House members, especially Republicans, faced criticism that the plan would be a bailout.
Republican staff in the House went back to work and made sure the plan didn't use any federal money. Today, Ryan said the plan is definitely not a bailout.
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PAUL RYAN: Our fellow citizens in Puerto Rico are in a tough spot. We think this bill helps them get out of this though spot while protecting the U.S. taxpayer.
ALLEN: The plan establishes a financial control board with members appointed by the president from a list of candidates submitted by Congress. The board has subpoena power and will conduct hearings into Puerto Rico's cloudy government finances. Under the bill introduced in the House Natural Resources Committee, the Control Board has the authority to restructure debt payments with court approval but must protect payments given higher priority under the island's constitution.
House Democrats and the White House were consulted as the bill was being written. Treasury Secretary Jack Lew said today he's sorry it doesn't include proposals he advocated, such as efforts to promote economic growth. But overall, he called it a fair but tough bipartisan compromise. Here's House Democratic leader Nancy Pelosi.
NANCY PELOSI: Of course it would not be the bill we would have written, but it does contain a restructuring that can work.
ALLEN: Officials in Puerto Rico have mixed feelings about the bill. Governor Garcia said he was encouraged but called the bill with its control board an attack on the territory's self-government. Congressional leaders hope to pass the bill by early next month. The timing is important. Puerto Rico has a nearly $2 billion debt payment due July 1, and the government says it doesn't have the money. Greg Allen, NPR News. Transcript provided by NPR, Copyright NPR.