WASHINGTON – The House Natural Resources Committee on Wednesday postponed its scheduled release of a new bill to help Puerto Rico for what members hope will be only one day as discussions about acceptable revisions continued.
Committee chair Rob Bishop, R-Utah, had said earlier in the week that the bill would be released on Wednesday with a vote to take place on May 18. Those plans were scuttled this morning with the delay, first announced by the highest ranking Democrat on the committee, Rep. Raul Grijalva, D-Ariz.
"We are making progress, but we are not there yet," Grijalva said in a statement. "The situation in Puerto Rico is dire, but a bill that doesn't solve the problem, or doesn't pass, won't help anyone," he said, adding, "I remain hopeful that with a little more work we can get there."
Parish Braden, the committee's communications director, confirmed the delay but said "we're in a good place" and that the committee is "working through some technical stuff and refinements."
Despite the many delays in moving the bill to date, Braden said the committee is still aiming to have legislation to help Puerto Rico before July 1, when the commonwealth faces $2 billion in bond payments, $800 million of which is for general obligation bonds backed by the commonwealth's constitution.
"I would say that in the interest of protecting U.S. taxpayers, mitigating a humanitarian crisis, and avoiding any potential spillover and borrowing costs from a massive default that results in decades lost for American citizens on the island, yeah we want to get something before that deadline," Braden said.
Puerto Rico is currently struggling with roughly $70 billion in debt and $46 billion in unfunded pension liabilities.
The current bill, a revision from the original draft, seeks to balance competing interests by creating a seven-member, presidentially-appointed oversight board for Puerto Rico that would have the power to require balanced budgets, address pension liabilities, and 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.
The new bill is expected to keep that structure but incorporate changes that address concerns and complaints from federal and Puerto Rican officials as well as creditors.
Braden said some main points of discussion have been the oversight board's structure and the restructuring framework. The new bill will have some clarifications about maintaining the protection of the existing debt hierarchy in any kind of restructuring, he said. There have been debates between Democrats who want pension benefits for retirees given a higher priority in debt restructuring and Republicans who want to maintain the existing legal hierarchy.
The new bill will also clarify a few details about the process of appointing the oversight board, which some Democrats and Puerto Ricans have said is too powerful and threatens Puerto Rico's local autonomy.
Some of the bill's provisions that would transfer part of the Vieques National Wildlife Refuge to the island's government will change, Braden said, but the bill will keep other provisions that would lower the minimum wage to $4.25 for workers up to 25 years old on the island. Democrats have criticized both parts of the bill.
Many Democrats have made clear that they will not support the bill until officials from the Treasury Department endorse it. Treasury has so far had the most issues with the restructuring provisions in the bill, saying the collective action clause and barriers to restructuring in the previous versions are too strict.
"I'm not saying they're all the way there yet," Braden said about Treasury officials.
Some conservative Republicans have said they will not support the bill because the restructuring language it contains too closely mirrors Chapter 9 bankruptcy and would set a dangerous precedent for financially troubled states to seek a similar solution from Congress. Many of them played a role in the postponement of a vote scheduled for March, when it was clear the bill would face significant opposition from committee members.
