WASHINGTON – Senate Minority Leader Harry Reid, D-Nev., made a final pitch on Thursday for lawmakers to include provisions to help Puerto Rico with its debt crisis in the pending omnibus spending bill, calling it “the moral thing to do.”
“To deny Puerto Rico restructuring authority is not just bad for Puerto Rico, but bad for creditors as well,” Reid said. “So I say to my Republican colleagues let's work together to extend a helping hand to our fellow citizens of Puerto Rico.”
Reid made the pitch less than 24 hours after House Speaker Paul Ryan, R-Wis., said that he is instructing all House committees that have jurisdiction over Puerto Rico to work with commonwealth officials to come up with a "responsible solution" to the fiscal and debt crises by the end of March. Ryan did not specify what type of solution they should seek, but Republicans generally have been opposed to extending bankruptcy protection to Puerto Rico or its authorities.
"Puerto Rico's fiscal crisis is a problem that is not going away any time soon," Ryan said. "While we could not agree to include precedent-setting changes to bankruptcy law in this omnibus spending bill, I understand that many members on both sides of the aisle remain committed to addressing the challenges facing the territory."
The Reid and Ryan statements followed Puerto Rico Gov. Alejandro García Padilla’s warning on Wednesday that the commonwealth will default on bond payments in either January or May of the coming year.
Resident Commissioner Pedro Pierluisi, D-P.R., said on Thursday that he is “pleased that Speaker Ryan affirmed that members of Congress on both sides of the aisle are committed to addressing the economic and fiscal challenges in Puerto Rico.”
“I know Speaker Ryan understands that time is of the essence,” Pierluisi said. “An indispensable element of any legislative package will be a provision empowering the Puerto Rico government to adjust a meaningful portion of its bonded debt, as every state government is empowered to do.”
Republicans and Democrats had been negotiating on possible legislative aid for Puerto Rico during the days leading up to the release of the omnibus spending bill late Tuesday, but the bill in its current form only contains Medicare provisions and authorizes the Treasury Department to use some of its funds to provide technical assistance to the commonwealth.
Reid said he and House Minority Leader Nancy Pelosi, D-Calif., fought to include provisions in the omnibus that would have allowed Puerto Rico to readjust portions of its debt, but that Republicans refused to work with them.
“I understand there are important issues that must be discussed such as the nature and scope of the authority, but to deny Puerto Rico any restructuring authority as Republicans have done is negligent,” Reid said. “I hope recent comments by Republican leaders, including Speaker Ryan, will translate into meaningful action.”
Sens. Chuck Grassley, R-Iowa, Orrin Hatch, R-Utah, and Lisa Murkowski, R-Alaska, recently introduced a bill that would create a financial advisory authority for Puerto Rico but would not give the commonwealth’s public authorities the ability to restructure. The discussions with Democrats over the possibility of including a bankruptcy provision in the omnibus fell apart after Grassley held firm on his long-held opinion that federal restructuring authority is not the right solution for the commonwealth, sources said.
