Puerto Rico Debt Rescue Package Passes in U.S. House

Puerto Rico

The U.S. House of Representatives has passed a bill to provide financial aid to Puerto Rico. The U.S. territory is suffering under a burden of expenses and not enough money to make ends meet. The House voted 297 to 127 in favor of the legislation, on June 9, 2016. Republicans and Democrats worked together and were able to get this legislation passed.

Speaker of the House Paul Ryan (R-Wis.) said that the bill offered the best opportunity to aid Puerto Ricans, who are “our fellow Americans.” Additionally, Nancy Pelosi (D-Calif.), the House Democratic head and President Obama, both backed the bill in order to avoid what the White House described as a potential “economic and humanitarian crisis.”

Puerto Rico has long been spending too much and raising too little in revenue to maintain fiscal stability. This led to this crisis. To assist the island in maintaining discipline in its fiscal policy, the legislation provides for the creation of a financial control board to oversee spending. In early July 2016, Puerto Rico has a $2 billion payment to make on outstanding debt which it cannot currently meet. This bill provides the ability for debt restructuring of the $70 billion debt under which it is laboring.

The next step in the process is for the Senate to take up the bill. It is expected to pass in that chamber.

By Bob Reinhard
Edited by Cathy Milne

Associated Press: House passes bill to help ease Puerto Rico’s debt
Bloomberg: On Eve of Default, Puerto Ricans Are Broke and Feel Out of Luck

Image Courtesy of Peter Dutton’s Flickr Page – Creative Commons License