Puerto Rico Crisis Spurs U.S. Congress to Advance Chapter 9 Bill

Strong Merits for Puerto Rico Chapter 9 Option: Earnest

New York Senator Charles Schumer, the third-highest ranking Democrat in the chamber, will team up with Connecticut Democrat Senator Richard Blumenthal to sponsor a bill that would allow Puerto Rico’s government agencies to file for Chapter 9 bankruptcy protection.

The bill would be a companion to legislation in the U.S. House sponsored by Puerto Rico’s non-voting member of Congress Pedro Pierluisi. Schumer said he and Blumenthal are seeking support from Senate Republicans as well.

“Senator Blumenthal and I will introduce this bill either way, but we are hoping to get Republican cosponsors to make this bill bipartisan,”‎Schumer said Tuesday in an e-mailed statement.

Representative Nancy Pelosi, the top Democrat in the House, also spoke in support of the bill after the White House urged Congress on Monday to consider the legislation.

Pelosi “believes House Republicans should bring this legislation for a vote as soon as the House is back in session,” Evangeline George, a spokeswoman for California’s Pelosi said in an e-mail Tuesday. Lawmakers in both the House and Senate are on an Independence Day recess and will return to Washington next week.

The White House, which isn’t contemplating any bailout for Puerto Rico, on Monday urged Congress to examine the Chapter 9 legislation instead.

Puerto Rico Governor Alejandro Garcia Padilla this week said the island plans to delay payments on its $72 billion debt for “a number of years” as part of a plan to bolster the commonwealth’s finances and revive its economy. The island’s main electricity provider, known as Prepa, may default on a $416 million debt payment due Wednesday.

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