Puerto Rico debt relief faces serious challenges in Senate

Puerto Rico debt relief faces serious challenges in Senate
© Getty Images

A bill to help Puerto Rico handle its $70 billion debt crisis is facing an uncertain future in the Senate. 

No Senate Democrats have endorsed a bill backed by House Speaker Paul RyanPaul Davis RyanPaul Ryan researched narcissistic personality disorder after Trump win: book Paul Ryan says it's 'really clear' Biden won election: 'It was not rigged. It was not stolen' Democrats fret over Trump-district retirements ahead of midterms MORE (R-Wis.) and Minority Leader Nancy Pelosi (D-Calif.), while some are actively fighting it.

ADVERTISEMENT

Sen. Bernie SandersBernie SandersBiden touts 'progress' during 'candid' meetings on .5T plan Manchin: Biden told moderates to pitch price tag for reconciliation bill Biden employs flurry of meetings to unite warring factions MORE (I-Vt.), a Democratic presidential candidate, said the bill treats Puerto Rico “like a colony” by setting up an unelected oversight board to restructure the U.S. territory’s debt.

He has argued the bill would help hedge funds and says the Federal Reserve should step in to buy and restructure the commonwealth’s debt. 

Sen. Bob MenendezRobert (Bob) MenendezBiden, don't punish India Democrats reject hardball tactics against Senate parliamentarian  Biden threatens more sanctions on Ethiopia, Eritrea over Tigray conflict MORE (D-N.J.) called a key provision of the bill “neo-colonialism,” and has teamed up with Rep. Luis GutierrezLuis Vicente GutierrezBiden's inauguration marked by conflict of hope and fear The Hill's Campaign Report: Democratic primary fight shifts to South Carolina, Nevada Democrats rally behind incumbents as Lipinski takes liberal fire MORE (D-Ill.) to push for changes before the House votes on it.

On the Republican side, senators say they’re hopeful to pass a bill but don’t know if they can support the current legislation — which is expected to win House approval given its backing from leaders in that chamber.

“We've stayed in touch with the House as they've negotiated their way through it,” said Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellOn The Money — Democrats rush to finish off infrastructure Biden employs flurry of meetings to unite warring factions GOP senators say Biden COVID-19 strategy has 'exacerbated vaccine hesitancy' MORE (R-Ky.). “We've been informed and we're anxious to take up whatever they can pass.”

Called the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), the bill was crafted through months of arduous negotiations and survived fierce political headwinds.

Puerto Rico faces a $2 billion payment deadline in July, and lawmakers would like to get a bill to President Obama’s desk before it comes due.

Some of the legislation’s biggest critics, including Puerto Rico’s non-voting representative, are quick to point out its flaws. Still, they insist it’s the only viable solution to prevent a much worse crisis.

PROMESA passed the House Natural Resources Committee on Wednesday with wide bipartisan support, a key hurdle before a vote on final passage through the House. But the opposition from Sanders and Menendez coupled with the cool reception from other Democrats poses trouble for the bill if it gets to the Senate.

Sen. Dick DurbinDick DurbinCOVID-19: US should help Africa, or China will GOP warns McConnell won't blink on debt cliff The Hill's Morning Report - Presented by Alibaba - Government shutdown fears increase as leaders dig in MORE (D-Ill.), second in command of the Senate Democrats, said this week that he has major problems with the bill and that several colleagues have spoken out against it behind closed doors.

He cited provisions that would allow Puerto Rico’s governor to cut the minimum wage for young workers, and an exemption for businesses in the territory from a recent Labor Department rule that greatly expands the number of salaried employees eligible for overtime pay.

“I think there are a lot more questions,” said Durbin. “At this point there's a lot of pushback in my caucus.”

Other Senate Democrats have been tepid on the bill or have reserved judgment.

Minority Leader Harry ReidHarry Mason ReidTo Build Back Better, we need a tax system where everyone pays their fair share Democrats say Biden must get more involved in budget fight Biden looks to climate to sell economic agenda MORE (Nev.) said the upper chamber wouldn’t have a bill until mid-June and doesn’t want to weigh in until it reaches the Senate.

“Let's wait until we get the bill before we start choosing sides,” Reid said. 

Sen. Chuck SchumerChuck SchumerBiden touts 'progress' during 'candid' meetings on .5T plan Progressives push for fossil subsidy repeal in spending bill Louisiana delegation split over debt hike bill with disaster aid MORE (N.Y.), the Democratic leader-in-waiting, and Senate Finance Committee ranking Democrat Ron WydenRonald (Ron) Lee WydenBiden touts 'progress' during 'candid' meetings on .5T plan Manchin: Biden told moderates to pitch price tag for reconciliation bill Biden employs flurry of meetings to unite warring factions MORE (Ore.) said they haven’t reviewed the bill closely enough yet to speak on it.

Senate Republicans are also treading carefully, saying they’re eager to act but nervous the bill won’t solve Puerto Rico’s problems long-term. 

Finance Committee Chairman Orrin HatchOrrin Grant HatchLobbying world Congress, stop holding 'Dreamers' hostage Drug prices are declining amid inflation fears MORE (Utah), called the bill “a really strong, heartfelt effort to get something done this time,” but is concerned “that we’ll be right back where we are now in a couple of years.”

“I probably will have to support it,” he added. “It may be the only approach that can be done at this particular point.”

Sen. Marco RubioMarco Antonio RubioDemocrats face bleak outlook in Florida The Hill's 12:30 Report - Presented by Facebook - Dems attempt to tie government funding, Ida relief to debt limit Poll: Trump dominates 2024 Republican primary field MORE (Fla.) said he was “encouraged” by the bill, but has questions about how it treats bondholders and the precedent it sets for other territories and states. Many Republicans in both chambers share those concerns. 

“We need to do something and so far what the House has produced is as close as anything I’ve seen to the kind of product that I can potentially support,” said Rubio.

“I want to support something. I really do want to us to do something on this,” he said.