WASHINGTON – Senate Democrats on Tuesday introduced another bill that would give Puerto Rico broad debt restructuring capabilities.
Sens. Kirsten Gillibrand from New York, Elizabeth Warren from Massachusetts and Richard Blumenthal from Connecticut introduced their legislation one day after Sen. Bob Menendez, D-N.J., offered two bills for Puerto Rico that were more expansive.
Gillibrand’s bill, called the Territories Relief Act, would “give Puerto Rico the ability to file for bankruptcy protection and restructure its debt in a transparent, orderly way,” she said in a release.
Gillibrand and her two co-sponsors held a press conference on the bill on Tuesday along with New York City Council Speaker Melissa Mark-Viverito, Sen. Chuck Schumer, D-N.Y., Lin-Manuel Miranda, the Grammy award winner who created the musical Hamilton, and several other community leaders.
The bill extends the ability to adjust debt to both a territory’s public authorities as well as the territory itself. It specifies that any restructuring would have to be filed with the bankruptcy court for the judicial district in which the territory or municipality is located. The chief judge of the court of appeals for the circuit that covers that district would be responsible for naming the bankruptcy judge that would handle the case.
If the bill passes, the U.S. Treasury Department secretary would have 180 days to work with the territory’s government and carry out the language of the bill.
Puerto Rico is currently struggling under $70 billion of debt and has several major debt service payments coming up in May and July.
“Congress must take action now to help our fellow citizens in Puerto Rico,” Gillibrand said. “I urge all of my colleagues to act with a sense of urgency to pass this legislation and help put Puerto Rico on the path to recovery.”
Blumenthal warned that congressional inaction from such disagreements over a solution “is only fanning the flames” as Puerto Rico’s “fiscal fire continues to spread.”
Warren said there should be concerns that “Wall Street creditors” will pick apart what is left of the Puerto Rican economy if such a bill is not passed.
Legislators have been debating possible solutions for the beleaguered commonwealth for months and the House is working under a March 31 deadline to craft a solution.
One of Menendez’s bills would give Puerto Rico broad restructuring powers as well as better federal tax and healthcare treatment. It would also establish a nine-person oversight board that would work with Puerto Rico’s government.
The Gillibrand and Menendez bills will likely face resistance in Congress as Republicans have generally opposed territory-wide restructuring capabilities for the commonwealth.
