Congress and Bankruptcy Lifeline for Puerto Rico
Sharon Edmondson, Washington Legislative Team Member | July 09, 2015
Many Hill Republicans, from GOP presidential hopefuls to fiery rank and file conservatives, are not interested in rescuing Puerto Rico from self-induced borrowing woes by allowing it to access key bankruptcy protections.
House Speaker Boehner has moved the issue to the House Judiciary Committee and Senate Majority Leader McConnell declined to comment.
Senators Schumer (D-NY) and Blumenthal (D-Conn) are ready to introduce their companion bill to the House bill (HR 870). Resistance to the bill is already mounting in the House Judiciary Committee, whose members are among the most conservative in Congress.
In contrast to the House, there are bipartisan negotiations in the Senate around the legislation that would give Puerto Rico more flexibility to manage its debt. Some senators have been speaking with Puerto Rican official lawmakers to adopt a budget for the next fiscal year to control its finances, as well as a longer, five-year fiscal plan. The Senators would like to take up the issue before the August recess.
There is a time constraint to this issue since Puerto Rico’s financial officials warned in April that the territory is likely to run out of money within three months, which would be July. In addition to the time constraint, Senator Cornyn (R-TX) has added a suggestion for expanding the legislation to allow states to enter bankrutpcy, sensing an opportunity to have a broader fiscal conversation.