WASHINGTON – A House bill designed to help Puerto Rico will now move to the Senate after House members passed the bill 297 to 127 during a session that stretched into early Thursday evening.
The bill garnered strong support from lawmakers on both sides of the aisle. A total of 139 Republicans voted for it, with 103 voting against it and five not voting. On the Democratic side 158 members voted for the bill, 24 against it, and six did not vote.
The members also passed by voice vote seven of eight amendments debated during the session. The amendments will mainly bolster or clarify portions of the bill passed by the House Natural Resources Committee on May 25.
The only amendment to fail was one offered by Rep. Norma Torres, D-Calif., and others that would have stricken a provision of the bill that could allow Puerto Rican employers to pay workers under 25 years old less than the minimum wage. The final vote on that amendment was 196 in favor to 225 against.
The House bill, called PROMESA, is the product of extensive negotiations between lawmakers from both parties, the administration and Puerto Rico officials led by the Natural Resources Committee. It seeks to balance competing interests by creating a strong oversight board that would have the power to require balanced budgets and fiscal plans, as well as to file debt restructuring petitions on behalf of the commonwealth and its entities in a federal district court as a last resort if voluntary negotiations do not succeed.
Puerto Rico is currently struggling with roughly $70 billion in debt and $46 billion in unfunded pension liabilities.
The bill's fate in the Senate is still uncertain as Republican senators have expressed a hesitancy to back it in the past and Sens. Bob Menendez, D-N.J. and Democratic presidential candidate Bernie Sanders, of Vermont, have been vocal opponents more recently. However, before the House vote several top senators said they would likely take up and pass the House bill if it made it out of the chamber by the end of the week, according to several media reports.
House leaders, including those from the Natural Resources Committee, said during debate on the bill that it may not be ideal, but it is a compromise that is the best, if not only, option for Puerto Rico.
House Speaker Paul Ryan, R-Wis., said on the floor that passing the bill allows Puerto Rico to get a handle on its debt.
"Its economy will grow, and taxpayers will be safe," Ryan said. "I'm telling you right now: the best chance creditors have to get what they're owed is this bill."
Natural Resources Committee chair Rob Bishop, R-Utah, said the bill fulfills Congress' constitutional responsibility to uphold its obligations to the American citizens in Puerto Rico.
"It is my hope the Senate acts expeditiously to pass this legislation," Bishop said.
An administration spokesperson lauded the vote and echoed Bishop, saying the Senate needs to act quickly so the president can sign the bill into law before the commonwealth faces a roughly $2 billion debt payment on July 1. Puerto Rico's governor has said the territory will default on that payment.
"We urge leaders in both parties to build on today's bipartisan momentum and help Puerto Rico move toward lasting economic prosperity," the spokesperson said.
Resident Commissioner Pedro Pierluisi, Puerto Rico's nonvoting member of Congress, said the bill accomplished the first step in dealing with an emergency, to stabilize the solution.
"Without PROMESA, the Puerto Rico government is likely to collapse, participants in public pension plans will be terribly harmed, and many bondholders could lose their investments," Pierluisi said. "PROMESA is in the interest of all stakeholders."
However, he added that while the bill is an "essential first step," Puerto Rico must in the future become either "a full and equal member of the American family as a state" or must become a sovereign country.
Several Democratic legislators applauded Pierluisi for his leadership and support of the bill, which they said came at a political price as he lost in a primary bid to represent his party in Puerto Rico's upcoming gubernatorial election in November.
The first amendment the members approved in the session came from Bishop. The amendment was a "manager's amendment" that provided a number of technical and other changes to the legislation.
The amendment, among other things, deletes the opt-in option for other territories and gives the oversight board the opportunity to review territorial laws enacted between May 4, 2016 and the full appointment of board members. It moves up the president's appointment deadline for the board to Sept. 1, 2016 from Sept. 30, 2016. It also requires the board be up and running by Sept. 15. Additionally, it lays out an initial funding plan that requires Puerto Rico's governor to transfer the greater of $2 million or an amount determined by the oversight board to a special board account on the date of the board's establishment and on the fifth day of every month thereafter.
If a court holds that the legislation is invalid because it does not treat similarly situated territories uniformly, the Bishop amendment requires the court to reinstate the opt-in provision.
Other amendments that passed include one from Reps. Jose Serrano, D-N.Y., and Nydia Velazquez, D-N.Y., that preserves the ability of a Puerto Rico commission to continue studying the legality of some of the commonwealth's debt issuances and to allow the Puerto Rican government to act on that information. That commission recently released a report that said much of the commonwealth's debt may have been issued illegally. If that is true, Puerto Rico may take the stance it does not have to pay that debt.
Another amendment that passed, sponsored by Reps. Sam Graves, R-Mo., and Mike Capuano, D-Mass., gives priority to protecting federal taxpayer assets in Puerto Rico, like mass transportation assets.
Other amendments added to the final House bill include one that will require the Congressional Task Force on Economic Growth in Puerto Rico to report to Congress on ways to reduce child poverty and another that will require the Government Accountability Office to submit a biennial report to Congress on the debt and revenue levels of each territory and the drivers of the debt.
Rep. Bradley Byrne, R-Ala., who sponsored the amendment to require the GAO report, said the proposal is a response to his failed efforts to get Treasury to conduct and circulate a similar report.
Early in the session, Byrne said that the fact that Congress reached the point of needing to pass legislation "is a direct result of the president and the Treasury department being asleep at the switch."
"Since the Treasury Department won't take responsibility and do its job, we are going to do our responsibility through the GAO," Byrne said during debate of the amendment.
Another amendment that Byrne co-sponsored sets a deadline of 18 months for a required report in the bill that will examine the conditions that led to Puerto Rico's fiscal situation.
Other representatives, including Duffy, Pierluisi, and Rep. Don Young, R-Alaska, sponsored an amendment that removes a cap on the federal HUBZone program when it is applied to Puerto Rico. The program is meant to stimulate small business growth in economically troubled areas.
