Senate faces critical vote on Puerto Rico

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Senate leaders from both parties threw their support behind a House bill to provide debt relief to Puerto Rico on Tuesday.

They also struck a confident tone that the legislation will be approved — assuming the other side can deliver enough votes.

The Senate has until the end of Thursday to approve the Puerto Rico legislation before the island is expected to default Friday on $2 billion in bond payments.

The bill would establish an outside fiscal control board to steer the island’s finances. In addition, the territory would be able to restructure its $70 billion in debt, which island officials say is no longer payable.

Sen. John Cornyn (R-Texas), the Senate Majority Whip, refused to entertain the idea that the bill could fail, which could expose the island to a raft of litigation from investors following the massive default.

“Failure is not an option,” he said. “I’m not going to speculate because this isn’t going down.”

The bill is set for a procedural vote Wednesday. If it clears that 60-vote hurdle, the chamber could send it to the president as soon as Thursday — one day before the island defaults.

Defections are expected from both parties, meaning Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Harry Reid (D-Nev.) will need to win over enough of their members to get to 60 votes.

On the left, opponents include Sen. Bob Menendez (D-N.J.) and Sen. Bernie Sanders (I-Vt.), the progressive presidential candidate.

“I will do everything I can to defeat this horrific bill,” Sanders said Tuesday. He argues the legislation would represent a victory for hedge funds at the expense of Puerto Rico’s citizens.

Sen. Chuck Schumer (D-N.Y.) said he believes there are “probably 30 Democrats who will vote for this bill.”

“We need a lot of Republican votes. Let’s see if we get them,” he said.

The main gripe for Democrats, even among those who plan to support the bill, is their inability to offer any amendments to the measure.

Reid announced his support on Tuesday, but he then slammed McConnell for blocking amendments.

Republicans argue that the closed process is the only way to ensure a bill reaches the president’s desk before the July 1 default.

“Ideally, we would like to have an open process…but we just don’t have the time here,” said Cornyn.

With the House out of town on a week-long recess, any changes to the bill would ensure the July 1 deadline would come and go with no action from Washington since the House would not have time to consider them.

Sen. Marco Rubio (R-Fla.), whose home state has seen an influx of Puerto Ricans moving to the mainland following the island’s economic decline, was actively working to sell the bill to his colleagues Tuesday.

“I think we’re gaining votes by the moment,” he told reporters. “Hopefully by the time we have the vote tomorrow we’ll have the necessary number.”

Senate Republicans discussed the bill at their weekly private lunch, and Sen. Johnny Isakson (R-Ga.) said he did not hear any members argue against the bill.

“I’m sure there will be some ‘no’ votes, but not many,” he said.

Many conservatives in the House opposed the bill because of the way it would allow the island to restructure its debt with creditors, however, and some conservatives in the Senate are expected to follow suit.

The White House has thrown its muscle behind the package, which the Treasury Department painstakingly hammered out over weeks of talks with House negotiators.

“The risks of Puerto Rico descending into chaos are very real, and the alternative is action,” Treasury Secretary Jack Lew told reporters on Tuesday after his own meetings with Senate Democrats.

“It is a choice between something that works and something that will be just a terrible ordeal,” he added.

Puerto Rico’s Gov. Alejandro Garcia Padilla was also in Washington to sell lawmakers on the bill.

Meanwhile, a coalition of major labor unions urged lawmakers to reject the package, arguing it fails to protect worker pensions on the island, while including provisions easing minimum wage and overtime requirements. Among the unions signing on to the letter were the AFL-CIO and the Service Employees International Union (SEIU).

The Senate must be provided an opportunity to have an open and thorough debate on the bill, including an opportunity to offer amendments,” the groups wrote.

Menendez  spent several hours on the Senate floor on Tuesday blasting the bill.

He argued that one of the bill’s main provisions, which establishes an outside control board to steer the island’s finances, effectively amounts to colonialism, as outside experts dictate the island’s affairs to its residents.

Meanwhile, a small group of Rust Belt senators said they would oppose the bill not on its merits, but in an effort to gain consideration for an unrelated bill pertaining to pensions for miners.

Several other members said Tuesday that while the bill was not perfect, they would back it.

“This is not the bill that I would have written,” said Sen. Ron Wyden (D-Ore.). “But it does provide the necessary tools to save Puerto Rico from further disaster.”

“I deeply regret some of these very harmful provisions,” said Sen. Richard Blumenthal (D-Conn.), “but rejecting this deal now means a sea of chaos and cost.”

 

 

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