WASHINGTON — The omnibus spending bill for fiscal 2016, which failed to extend bankruptcy protection to Puerto Rico, was released as Gov. Alejandro Garcia Padilla said on Wednesday that the commonwealth will default on debt payments in January or May of the coming year.
Sens. Chuck Schumer, D-N.Y., and Maria Cantwell, D-Wash., met with Sens. Chuck Grassley, R-Iowa, Orrin Hatch, R-Utah, and Lisa Murkowski, R-Alaska, in the days leading up to the release of the omnibus bill to try to forge a compromise on extending bankruptcy protection and other provisions for the troubled commonwealth, according to knowledgeable sources.
While Democrats were expecting a possible compromise to emerge from the ongoing talks, Republicans insisted that any solution would require more time and they, particularly Grassley, held firm against allowing bankruptcy protection for Puerto Rico, the sources said.
"Democrats wanted the quick band-aid solution," according to one source, Republicans maintained that the situation was more complex.
The Democrats' ongoing push to extend bankruptcy protection to the island's public authorities has been further frustrated by some Puerto Rico officials' advocacy for a broader more controversial approach that would extend bankruptcy protection to the entire commonwealth, the source added.
House Minority Leader Nancy Pelosi, D-Calif., reportedly had a Puerto Rico compromise down as the second goal on her list of priorities to include in the omnibus legislation, but there were never serious discussions in the House on a solution because Republicans, like their colleagues in the Senate, saw the situation as too complex and were almost uniformly opposed a Chapter 9 bankruptcy solution.
The failed discussions have pointed out that the ongoing problems with Puerto Rico discussions in Congress, as Democrats have tended to believe warnings by Puerto Rico Gov. Alejandro García Padilla and Treasury Department officials that the commonwealth is in a dire crisis, while Republicans do not.
"This is exactly the problem — Democrats are thinking about a crisis," the source said. "Republicans [believe] that this isn't a crisis, this is really a big, long-term problem [and they] don't have to act as if this were a crisis."
While both parties could not reach agreement on a solution for the island, they did include two health care provisions for Puerto Rico in the omnibus bill.
The first would allow Puerto Rico hospitals to receive the same base rate for each discharged Medicare patient as in the 50 states and the second would allow Puerto Rico hospitals that become meaningful users of electronic health records to receive bonus payments under the federal Medicare program.
The omnibus would also allow the Treasury Department to use some of its funding to give Puerto Rico technical assistance in dealing with its finances.
The lack of significant assistance for the commonwealth drew complaints from its supporters. Resident Commissioner Pedro Pierluisi, who sponsored the Medicare provisions, said he is pleased they were included but that the absence of a more comprehensive solution for the island eclipses the few positives in the bill.
"I am deeply disappointed, but not discouraged," he said.
Rep. Nydia Velázquez, D-N.Y., said, "It is unconscionable that Congressional Republicans refused to include in the year-end spending bill meaningful provisions to allow Puerto Rico to restructure its debt."
