CBO: Puerto Rico bill wouldn't add to deficit

Legislation to help Puerto Rico through its debt troubles will not add to the deficit, according to new analysis from the Congressional Budget Office.

The CBO determined Friday that legislation pending before the House would not carry a significant price tag, eliminating one potential political hurdle for the measure.

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Under the bill, Puerto Rico would be able to restructure its $70 billion in debt, and an outside fiscal control board would be established to oversee the island’s troubled finances.

The CBO calculated that this board would cost roughly $370 million over the next decade. However, Puerto Rico’s government has to cover those costs under the legislation.

The score helps clear the path for the bill, which was crafted over weeks of tricky negotiations between both parties and the White House. House leaders in both parties have given the compromise measure their blessing, as has the Obama administration. But it is unclear at this point whether the Senate will embrace this approach.

After years of economic decline and dwindling tax revenue, Puerto Rico officials say they no longer can pay back all of the $70 billion the island owes creditors. The island has already defaulted on several debt payments, and is likely to miss another $2 billion it owes on July 1 without legislative action.

The House measure passed the House Natural Resources Committee in May, and is set to receive a full House vote in early June.