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 Puerto Rico faced a historic default Friday as the U.S. territory prepared to enter unchartered waters under the guidance of a newly enacted federal control board to oversee the island's finances amid a dire economic crisis. The government paid roughly half of $2 billion in due debt, but said it did not have the money to pay $779 billion worth of general obligation bonds that are given top priority by the island's constitution. The payment was made just hours after the governor signed an executive order Thursday declaring a moratorium on a portion of that debt. "The government has always said that Puerto Rico's debt is unpayable and that the music would stop," Puerto Rico's Government Development Bank said in a statement. It oversees the island's debt transactions and is operating under a state of emergency. Bank officials announced Friday that Puerto Rico has only $200 million in cash in the operating account from which it was supposed to pay the ...

House Speaker Paul Ryan (R-WI) released the following statement after the Senate passed the bipartisan  Puerto Rico Oversight, Management, and Economic Stability Act   (PROMESA) : “I am pleased that the Senate has passed PROMESA, the result of months of work by the House. This bipartisan legislation addresses the fiscal crisis in Puerto Rico while protecting American taxpayers from a bailout of the territory. The legislation creates an oversight board that will institute the necessary reforms so Puerto Rico can begin to turn its economy around and get on a path to fiscal health. Congress has fulfilled our constitutional obligation and I urge President Obama to sign PROMESA immediately.” Puerto Rico Bill Heads to President’s Desk

The Supreme Court has struck down a Puerto Rican law that would have allowed the U.S. territory's public utilities to restructure their debt. The 5-2 ruling leaves management of the island's fiscal crisis to Congress. The House of Representatives   passed a bill last week   to help Puerto Rico manage its debt crisis. The Senate has not yet acted. By Robert Schroeder Supreme Court strikes down Puerto Rico debt restructuring law

What Does Debt Plan Mean for Puerto Rico?

The House of Representatives, in a rare moment of bipartisanship, passed a bill Thursday to help Puerto Rico restructure its massive, $70 billion debt load and hopefully avoid defaulting on any more of its debt payments. The bill establishes a seven-person advisory board that will be in charge of negotiating with the island's creditors, who lobbied hard against any kind of federal intervention out of fears the Puerto Rico would not pay its full debt. The Obama administration , led by Treasury Secretary Jacob Lew , has pushed hard to give the U.S. commonwealth some kind of relief, arguing that it has already cut back government services and needed some assistance. The bill, which passed 297-127 after a strong push by House Speaker Paul Ryan , R-Wis., did not include any direct financial assistance, allaying fears from many Republicans about a possible bailout. Instead, it allows the oversight board to negotiate with creditors and avoid a lengthy, and costly, battle in court. Rya...

The House on Thursday passed legislation to tackle Puerto Rico’s debt crisis, as Congress took a large step towards addressing the economic and humanitarian crisis enveloping the island. The carefully crafted compromise passed 297-127, earning majorities in both parties. The passage of the carefully crafted compromise is a significant win for Speaker Paul Ryan (R-Wis.), who was an early and active supporter of the legislation, and Minority Leader Nancy Pelosi (D-Calif.) and the White House, which also pushed the package. In a rare move, both Ryan and Pelosi took to the House floor to urge support for the legislation, shooting for broad bipartisan support to encourage speedy action through the Senate. Ryan made a moral case for the bill, arguing that the island's 3.5 million residents — who are American citizens — need Congress's support. "The Puerto Rican people are our fellow Americans. They pay our taxes. They fight in our wars," he said. "We cannot allow t...

Puerto Rico should avoid a potentially prolonged legal battle with bondholders by negotiating a reduction to its $70 billion debt, said New Progressive Party gubernatorial candidate Ricardo ‘Ricky’ Rossello, who criticized the current administration’s push to use the courts if such talks fail. In an interview in Manhattan, Rossello said the Puerto Rico Electric Power Authority’s December deal with creditors -- under which bondholders consented to a 15 percent loss -- is a model for how the U.S. territory can reduce what it owes. Governor Alejandro Garcia Padilla, a member of the opposing political party, has advocated for such a voluntary reduction, though he has pushed for power to cut the debt in court to put pressure on creditors. “Puerto Rico doesn’t win in a default and creditors don’t win in a default,” Rossello, a political commentator, said after speaking at Tuesday’s Debtwire conference. “There’s space for renegotiation of the terms, but it should be a good-faith renegotiation...

Hedge funds with billions of dollars at stake in Puerto Rico may be salivating over page 24, line 18 of legislation Congress will consider this week to address the island’s debt crisis. U.S. House leaders and Treasury officials jockeying to create a passable bill to pull Puerto Rico out of debt included a   provision  that has some experts scratching their heads: The board overseeing the restructuring can accept gifts. The legislation would create a seven-member board to manage the finances of the island struggling under $70 billion of debt. The panel, a central component of the bill, would have the power to ask a judge to order a forced restructuring if the commonwealth’s government can’t reach a deal with bondholders. It can also enforce balanced budgets for Puerto Rico’s government and recommend the sale of public assets if needed. While members will not be paid, the measure allows the board to “accept, use, and dispose of gifts, bequests, or devises of services or pro...

The U.S. government says that it would cost $370 million to implement a federal control board envisioned by legislation pending in Congress to oversee Puerto Rico's finances and that the island would have to pay the cost. The Congressional Budget Office issued the report Friday as Puerto Rico seeks help from the U.S. Congress to restructure $70 billion in public debt as the U.S. territory's government runs out of money amid the island's decade-long economic slump. The U.S. House is expected in upcoming weeks to debate the bill that proposes creation of a financial control board for Puerto Rico, among other things. The Congressional Budget Office also says that completing reports and administrative requirements detailed in the measure would cost the U.S. government $1 million next year. Read more here: http://www.heraldonline.com/news/business/article81645982.html#storylink=cpy The U.S. government says that it would cost $370 million to implement a federal control board...

Puerto Rico will no longer adopt a value-added tax, after lawmakers in the Senate voted to overthrow an attempt by Puerto Rico's Governor, Alejandro Garcia Padilla, to veto previously passed repeal legislation. Puerto Rico was due to introduce value-added tax in place of sales and use tax (SUT) from June 1. Puerto Rico's Senate on May 5, 2016, unanimously backed legislation earlier supported by the lower house of Parliament on May 2 to prevent value-added tax from being introduced. The Governor thereafter vetoed the legislation. However, lawmakers needed to only muster two-thirds support to override this veto. On May 26, 2016, the Senate voted to abandon the VAT plans by 21 votes to 1. - by Mike Godfrey, Tax-News.com, Washington Puerto Rico's VAT Plans Blocked By Lawmakers

Two Louisiana Republican congressmen are playing key roles — on opposite sides — in legislation aimed at addressing the looming $70 billion default by the U.S. territory of Puerto Rico. HR5278, on which the U.S. House of Representatives is expected to vote as early as Wednesday, essentially would establish an oversight board to help Puerto Rico manage its public finances. In the House Committee on Natural Resources last week U.S. Rep. Garret Graves, of Baton Rouge, was able to attach three amendments to the bill and voted with 29 committee members in favor of recommending the full House approve the measure called the “Puerto Rico Oversight, Management, and Economic Stability Act” or “PROMESA.” Rep. John Fleming, of Minden, on the other hand, has been critical of the legislation and pushed eight changes to the measure, all of which were either voted down (Graves voted against many) or sidetracked on procedural grounds. Fleming was among the 10 representatives on the panel who voted a...

Puerto Rico would lose much of its sovereignty under financial restructuring legislation passed out of the House Natural Resources Committee. Unfortunately, the bitter pill is unavoidable. With the U.S. territory increasingly unable to pay its bills — and little more than a month away from defaulting on a $2 billion bond payment — the bipartisan bill would create a long-term process for restoring fiscal stability. Washington must act because Puerto Rico was inexplicably denied the power to declare bankruptcy in the way that American cities, such as Detroit, have. Backed by President Obama, the legislation creates a bankruptcy-like process for relieving Puerto Rico of obligations, with rules specifying that bondholders and a pension system with $46 billion in unfunded liabilities would be treated equally. Another major provision would give a seven-member board much governing authority, including powers to force balanced budgets, sell off government assets, oversee negotiations with ...

Puerto Rico's governor has lost a battle to increase a business-to-business tax and impose a transition to a value-added tax system amid an economic crisis. Senators on Thursday gathered enough votes to approve a bill previously vetoed by Gov. Alejandro Garcia Padilla, who warned their actions would push the U.S. territory into deeper financial trouble. The bill prevents an increase of the business-to-business tax from 4 percent to 10.5 percent from going into effect next week. Garcia said that legislators who overrode his veto acted irresponsibly and that they did not identify any new sources of badly needed revenue. Puerto Rico is floundering amid 10 years of economic stagnation and faces a $70 billion public debt load that Garcia has said is unpayable and needs restructuring. Puerto Rico Senators Override Veto, Halt Tax Increase

Pssst. Don’t tell   Ted Cruz   or the media, but the Republican Congress is using conservative principles to solve an urgent problem caused by progressive government. With some fortitude and a little luck, the Commonwealth of Puerto Rico might even be able to grow again. House Republicans this week plan to mark up a revised bill to let Puerto Rico restructure its $72 billion debt under the supervision of a federal oversight board. Puerto Rico needs Congress’s help to prevent a creditor brawl when the island’s debt issuers inevitably default, as well as to arrest a decades-long recession and population exodus. The urgency of the problem gave Republicans political leverage with the   Obama   Administration, and Speaker   Paul Ryan   has used it. The bill offers debt relief to Puerto Rico in return for a mechanism to overrule the territory’s feckless current government and impose reform. The legislation explicitly pre-empts conflicting laws and regulations pas...

After months of negotiation, Republicans and Democrats in Congress have agreed on a plan to help Puerto Rico deal with its crushing $70 billion debt. It sets up a control board to investigate the U.S. territory's murky financial picture and restructure its debt payments to creditors. ARI SHAPIRO, HOST: 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 c...

After weeks of delays, House Republicans are moving forward with legislation to help Puerto Rico manage $70 billion in debt. A revised bill introduced late Wednesday would create a control board to help manage the U.S. territory’s financial obligations and oversee some debt restructuring. Though it is the third version of the legislation, those objectives remain unchanged. House Natural Resources Committee Chairman Rob Bishop, R-Utah, has led negotiations on the bill and has worked closely with House Speaker Paul Ryan, R-Wisc., congressional Democrats and the White House. The aim has been to write legislation that could pass both the House and the Senate before Puerto Rico defaults on a $2 billion debt payment due July 1. The committee could vote on the bill as soon as next week. Bishop originally introduced a bill last month, but canceled a scheduled committee vote after objections from both parties. Since then, he has worked closely with Ryan to win over conservatives who worry it...

As the U.S. Congress drags its feet on a bill to address Puerto Rico's $70 billion debt crisis, it could get kicked into high gear by an unlikely source: the Supreme Court. The highest U.S. court is due to rule by the end of June on the validity of a Puerto Rico law that would allow the U.S. territory to restructure the chunk of its debt issued by public agencies, more than $20 billion, in a bankruptcy-like process. The court fight is playing out as the Republican-led Congress grapples with legislation that lawmakers hope will prevent the need for a bailout of the territory of 3.5 million U.S. citizens. The legislation is expected to put Puerto Rico's finances under federal oversight through a control board and let the Caribbean island cut debt through a bankruptcy-like restructuring process. It would preempt the Recovery Act, the local restructuring law that was thrown out in U.S. courts before Puerto Rico asked the Supreme Court to reinstate it. Puerto Rico is not c...