Senate Republicans Work on Puerto Rico Bill as Default Looms

Top Senate Republicans with jurisdiction over Puerto Rico are working on a legislative proposal to help the commonwealth as it struggles with more than $70 billion of debt, countering a plan by the Obama administration.
The proposed bill will be finished “soon,” Robert Dillon, spokesman for the Senate Energy and Natural Resources Committee, said by phone Thursday. Republicans would prefer that Puerto Ricans solve the crisis on their own, but if they can’t, lawmakers will probably seek to impose “something like” a federal control board, Senate Finance Committee Chairman Orrin Hatch said in an interview Thursday.
It would be the first attempt by congressional Republicans to address the cash crunch on the island. Dillon didn’t specify whether the plan will be announced before Dec. 1, when Moody’s Investors Service expects Puerto Rico to default on a portion of $354 million payment due that day. The island has already defaulted on bonds from its Public Finance Corp.
The Obama administration has said it won’t bail out the island and urged Congress to act. So far, Republicans have declined to take action, saying there is no easy way to solve Puerto Rico’s problems and pointing to a lack of verifiable financial data.

Local Control

Puerto Rico lawmakers approved a bill late Tuesday to establish a local fiscal adjustment board, whose five members would be appointed by the governor. Pedro Pierluisi, Puerto Rico’s nonvoting member of Congress, rejected the idea of a federal board to oversee the territory’s finances, saying in Washington on Tuesday that it would amount to colonialism, The Hill reported.
Senator Charles Grassley, the Iowa Republican who is key to advancing Puerto Rico legislation, said in September that the island needs a federal control board to resist local pressure and implement necessary reforms such as trimming government jobs. 
The judiciary panel that Grassley leads will hold a hearing on Puerto Rico on Dec. 1. Dillon said the judiciary committee is also working on the legislative proposal. Grassley is focused on the upcoming hearing and “learning more about the root cause of the problem and discussing possible solutions,” his spokeswoman Beth Levine said in an e-mail Thursday.
The administration’s plan, supported by congressional Democrats and the Puerto Rican government, focuses on granting the island broad bankruptcy powers. Prior attempts to extend Puerto Rico’s access to bankruptcy procedures failed or stalled amid opposition from bondholders.
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Senate Republicans Work on Puerto Rico Bill as Default Looms

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