The US May Finally Give Puerto Rico a Financial Lifeline. Here's What's Happening.
After months of pleading by the governor of Puerto Rico and the island's representative to Congress, lawmakers have introduced legislation in both the House and Senate that would offer tangible help for the island's debt crisis. On Wednesday, the Republican chairs of three Senate committees proposed $3 billion in cash relief, a 50 percent payroll tax cut for Puerto Rico residents for the next five years, and the creation of an independent "assistance authority" that would help the government of Puerto Rico with its short-term and long-term budgeting process.
A separate House bill introduced Wednesday by Rep. Sean Duffy (R-Wis.) would permit the island's cities to restructure mounting debts through bankruptcy reorganization, an option available to cities in the United States but not in Puerto Rico. The legislation comes as the US territory grapples with ballooning debt payments on roughly $72 billion in borrowing that the island's governor, Alejandro García Padilla, has said the island cannot pay. According to Bloomberg, Puerto Rico is in danger of defaulting on $957 million in interest payments that are due on January 1.
The Senate proposal comes from a trio of Republicans who chair committees with various oversight responsibilities for Puerto Rico: Finance Committee Chair Orrin Hatch (R-Utah), Judiciary Committee Chair Chuck Grassley (R-Iowa), and Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alaska).