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Ahead of a one-week recess, House Republicans are showing little urgency to act on a bill to help Puerto Rico deal with its debt crisis as the island hurtles toward a potential default Sunday on a $422 million payment. "They got into this mess over the years. I don’t think we need to add to their bad decisions," said Representative Raul Labrador of Idaho, a Republican who was born in Puerto Rico. "I think we have to do this bill right." Labrador is a member of the House Natural Resources Committee, which is working on legislation to aid the island. The territory could still strike a last-minute deal to defer the payments due in three days, but Puerto Rico will likely default on some or all of the debt payments coming due on May 1. Democrats and the White House continue to blast the Republicans for not acting faster. "Some people get accused of being mañana people," said Representative Raul Grijalva of Arizona, the top Democrat on the Natural Resource

Puerto Rico owes its creditors  $422 million on May 1, and the island will likely not be able to make the full payment, according to many experts . That is a relatively small portion of the $70 billion debt burden that Puerto Rico’s government owes its external lenders. But default will likely subject Puerto Rico to more lawsuits, even as Congress is still dilly-dallying on legislation that would give the island some relief. Here are five things you need to know about what’s going on in Puerto Rico, how the situation got so bad and what the future holds. 1. Puerto Rico’s financial crisis has taken a massive human toll. In recent years, Puerto Rico’s government has made increasingly drastic spending cuts and tax hikes in order to meet its obligations to creditors. The government laid off tens of thousands  of public employees and raised the sales tax from 7 percent to 11.5 percent . It has closed some 10 percent of Puerto Rico’s schools since 2014, driving a sharp rise in the size

The Government Development Bank for Puerto Rico is negotiating with investors to reduce the par value of some of its notes by 47%. The GDB owes $422 million on Monday, a sum Puerto Rico officials have said it won't be paying. The bank is in negotiations with a group of debt holders who are owed $120 million, GDB president Melba Acosta Febo said, confirming a report in the El Vocero news website. It is seeking a forbearance agreement under which this group would refrain from enforcing debt remedies for a period of time. It is also in negotiation with another group owed a smaller amount of debt. The terms of at least one deal under negotiation would be that the debt holders would get recoveries as little as 53 cents on the dollar. Certain deals under discussion would involve extending maturities. "Sometimes you might think that 47% is a big discount, but you have to look at how these notes are being exchanged right now," Acosta Febo said. On Tuesday Markit reported a b

Puerto Rico plans to invoke a new law permitting the suspension of debt payments if the island fails to reach an agreement to defer $422 million in bond payments due May 1, a spokesman for the governor said. The commonwealth, which is grappling with a $70 billion debt crisis, remains in talks with creditors, Jesus Manual Ortiz, a spokesman for Governor Alejandro Garcia Padilla, said during a news conference in San Juan. A default on the bonds issued by the Government Development Bank would be the largest yet by Puerto Rico, which has said it has no choice but to renege on obligations because of its struggling economy and deteriorating finances. Garcia Padilla on April 6 signed the moratorium law allowing him to suspend principal and interest payments on a wide swath of debt, including the island’s general obligations. He has said that the U.S. territory can’t afford payments due in May and July. Moody’s Investors Service said last week that it expects Puerto Rico to default on the

Debt-ridden Puerto Rico faces a $422 million bond payment deadline Sunday with no sign Congress will act in time to help. Further complicating lawmakers' efforts to steer the U.S. territory away from economic collapse are ads airing nationwide that claim the legislation amounts to a financial bailout, even though the bill has no direct financial aid. Some House conservatives have latched onto that argument, making it difficult for Speaker Paul Ryan, R-Wis., to garner enough support for the bill. Natural Resources Committee Chairman Rob Bishop, R-Utah, says he is reworking the bill. House Majority Leader Kevin McCarthy on Tuesday acknowledged that House action won't come in time for Puerto Rico to avoid default on the nearly half-billion-dollar debt payment. The AP explains Puerto Rico's debt crisis, what's happening in Congress and the outside forces. ___ PUERTO RICO'S IN BAD SHAPE Puerto Rico's government is running out of money, partly because federal tax inc

Make no mistake about it: Puerto Rico will default in May on some of the $470 million it owes, according to Moody’s Investors Service. The cash-strapped commonwealth is expected to fall short of paying $422 million to holders of bonds from the Government Development Bank, the credit rater said Friday in a report. It may also default on debt from the Employees Retirement System, Industrial Development Co. and Highways and Transportation Authority because the GDB has just $562 million in liquidity as of April 1, Moody’s said. “These impending defaults would follow the government’s efforts to emphasize its severe cash depletion during the past year,” Moody’s analysts led by Ted Hampton and Emily Raimes wrote. “Even if federal oversight legislation is passed by the end of next week, Puerto Rico will still default because the commonwealth treasury and the GDB, which has long been the government’s fiscal agent, have insufficient liquidity for upcoming debt payments.” Moody’s expects Puert

Puerto Rico’s financial crisis comes from borrowing far too much while bringing in far too little, in the form of tax revenue, to pay the debt.  The island, a U.S. territory that has found little assistance from its governing body , watched its economy tank after manufacturers pulled out because of a repeal of tax incentives. The ensuing debt led to Puerto Ricans fleeing the island for the mainland — and jobs. It also led to problems like   escalating health care costs , and  hedge fund managers asking the government to close schools . So how did Puerto Rico  end up with this massive debt? Here's a brief history lesson: Puerto Ricans living on the island today are forced to watch their commonwealth's government, which they don't trust, spend their tax dollars. The host of ensuing problems have residents  feeling hopeless  and frustrated, including students who recently protested the government's allocation of funds away from their education to pay for unrelated bon

“Puerto Rico’s Sinking and I Don’t Want to Swim” was the other top candidate as a header. The current maelstrom has many questioning how the US got into this mess in the first place. Spain controlled Puerto Rico for 4 centuries, from 1493-1898. US victory in the Spanish-American war of 1898 saw Spain cede the Island of Puerto Rico to the US under the terms of the Treaty of Paris. The Spanish relinquished control of Cuba, Guam and the Philippines as part of the same conflict, which lasted a compact 10 weeks (fought in the Pacific and the Atlantic, obviously). At the time of the 1898 handover, Puerto Rico (PR) had a population of under 1 million (Florida’s Puerto Rican American population is now >1mm). The island population is now 3.6mm, and it has been dropping drastically, as the prospects for the Commonwealth (notably not yet a State) have deteriorated markedly. The 10 year phased roll off of Section 936 tax exemptions for PR domiciled manufacturing under Bill Clinton in 1996 was

El gobernador Alejandro García Padilla informó esta mañana que ha declarado un período de emergencia para el Banco Gubernamental de Fomento para Puerto Rico (BGF) “en aras de proteger y preservar los servicios esenciales de salud, seguridad y bienestar de los residentes del Estado Libre Asociado de Puerto Rico”. Para ello, ha firmado la Orden Ejecutiva Núm. OE-2016-10, una acción que toma conforme a los poderes que le confiere el Artículo 201 y 203 de la recién aprobada Ley Núm. 21-2016, conocida como la “Ley de Moratoria de Emergencia y Rehabilitación Financiera de Puerto Rico”. “A esos efectos, la Orden Ejecutiva establece procedimientos razonables y necesarios para preservar la liquidez del BGF y permitirle continuar sus operaciones en beneficio de la salud, seguridad y bienestar del pueblo”, explicó en declaraciones escritas. “Con la intención de propiciar negociaciones constructivas entre el BGF y sus acreedores y a la luz de las conversaciones en curso, esta Orden Ejecutiva no

El comisionado residente en Washington, Pedro Pierluisi, consideró esta tarde que la orden ejecutiva emitida más temprano por el gobernador Alejandro García Padilla para declarar estado de emergencia para el Banco Gubernamental de Fomento es una muestra de improvisación y que demuestra falta de capacidad para gobernar. “El gobernador repite hasta el cansancio la excusa de que heredó esta crisis. Pero lo cierto es que él y su administración la han empeorado gravemente, en vez de resolverla. Este gobierno recibió un BGF con cerca de $2,000 millones en liquidez, un mercado abierto y dispuesto a financiar y refinanciar la deuda de Puerto Rico si se mantenían medidas fiscales responsables y la transparencia necesaria. Pero este gobernador y su legislatura han creado una crisis sin precedentes en la Isla que hoy, según ellos, los obliga a tomar esta nefasta medida”, apuntó Pierluisi en comunicado de prensa. El estado de emergencia establecido mediante la orden impone limitaciones a las sol

 Legislative staff members in Washington were said to be close on Friday to completing a revised bill that would give Puerto Rico extraordinary powers to wipe out debt under close federal supervision. Aides at the House Natural Resources Committee, working through the spring recess, were still grappling with sensitive constitutional issues raised by the rescue package, even after lawmakers in San Juan took matters into their own hands on Wednesday by suddenly authorizing a unilateral debt moratorium for the island. The Puerto Rican lawmakers said they were forced to act because Congress was taking too long. Their island’s Government Development Bank has a debt payment of about $422 million due May 1, and only $562 million in available cash; the law they enacted would let the bank delay the payment lawfully — at least as far as Puerto Rico is concerned. Puerto Rico owes even bigger debt payments, totaling about $2 billion, on July 1. The House’s draft bill still contains certain pro

Washington • A shadowy group is running radio ads in Utah blasting Rep. Rob Bishop for legislation aimed at rescuing Puerto Rico from its massive debt problems, but the Utah Republican says the advertisements are simply false. The Center for Individual Freedom, a dark money group that does not list its backers, is airing ads on KSL and KNRS saying Bishop has unveiled a "radical plan called Super Chapter 9" to allow the U.S. territory bankruptcy protection that will hurt seniors and damage Utah's ability to borrow money. Puerto Rico created its own crisis, the ad says. The island's government is $70 billion in debt and an additional $46 billion in mostly unfunded pension liability. "What's worse is that congressman Rob Bishop is standing with the Obama administration to support a bail out of Puerto Rico instead of supporting negotiations between Puerto Rico and its creditors," the ad says. Bishop, who chairs the House Natural Resources Committee, which ha

Gov. Alejandro García Padilla of Puerto Rico on Wednesday signed a bill that would allow him to declare a state of emergency and give him authority to halt payments on the island’s crushing $72 billion debt. The measures capped two days and nights of marathon debate in Puerto Rico’s legislature, where lawmakers from the main opposition party called any unilateral debt moratorium dangerous and members of the governor’s party insisted that doing nothing would be even worse. In Washington, House Republicans seeking to rescue Puerto Rico prepared to release a revised plan that includes a federal oversight panel. The proposal has been contentious on the island, where the governor and his top advisers are increasingly at odds with investors over how to restructure the debt, most of it in the form of municipal bonds. “This legislation provides us with the tools to address the highest priority of needs — providing essential services to our people — without fear of retribution,” the govern

Puerto Rico’s governor on Wednesday signed an emergency bill allowing the government to halt payments on its debt, throwing into doubt broader restructuring plans to stave off a financial collapse of the U.S. territory. The measure, which earlier passed Puerto Rico’s legislature, lets Governor Alejandro Garcia Padilla declare a moratorium on any debt payment he deems necessary and could alter the structure of the Government Development Bank (GDB), the island’s primary fiscal agent. “This legislation provides us with the tools to address the highest priority of needs—providing essential services to our people—without fear of retribution,” Garcia Padilla said in a statement. Puerto Rico—burdened by a $70 billion debt load it says it cannot pay, a 45% poverty rate, and shrinking population—faces economic collapse without measures that either change its laws or involve an agreement with creditors. Wednesday’s emergency law was rushed into existence as the GDB faces possible default on a