The U.S. House of Representatives has overwhelmingly passed a bill to help Puerto Rico dig out of its financial mess.
H.R. 5278, termed the Puerto Rico Oversight, Management and Economic Stability Act or PROMESA (the Spanish word for “promise”), would create a financial oversight board with the authority to restructure some of the U.S. territory’s $70 billion debt.
It passed the House on Thursday with a vote of 297 to 127 as President Barack Obama, House Speaker Paul Ryan (R-Wis.), and Minority Leader Nancy Pelosi (D-Calif.) all lined up behind it.
“Today, the House acted to prevent Puerto Rico’s fiscal crisis from escalating to a humanitarian catastrophe,” Rep. Rob Bishop, a Republican from Utah who helped to draft the bill, said in a news release.
As The Hill reports, the crisis has been fueled by “years of economic decline and an exodus of Puerto Ricans to the U.S. mainland, leaving the island with a shrinking pile of revenues.”
Puerto Rico has already defaulted on its debts three times in the past year and a payment of nearly $2 billion is due July 1. But H.R. 5278 provides a grace period through at least February 2017 that allows it to only have to pay interest on its debts (if it can). Creditors would not be able to sue.
“The Senate should act expeditiously to review and vote on this measure, so the President can sign the bill into law ahead of the critical July 1st debt payment deadline,” White House Press Secretary Josh Earnest said after its passage.
The bill also would give the board the ability to sell Puerto Rican government assets and allow the territory to temporarily lower the minimum wage for some workers.
Co-sponsor Rep. Jim Sensenbrenner (R-Wis.) emphasized that the legislation was not a bailout.
“It does not spend a single cent of taxpayer money,” he said. “It’s a common sense solution to a crisis that is hurting millions of American citizens, and its passage today not only protects taxpayers, but brings renewed hope for a better future to every Puerto Rican.”