- Chairman says measure could reach president after July 1
- Island faces July 1 deadline for $2 billion debt payment
Proposed legislation to address Puerto Rico’s $70 billion debt is vital to restoring fiscal stability on the island, a House committee chairman said Tuesday, warning that the crisis will get much worse if Congress doesn’t act.
“If we do not pass this bill, Congress will be faced with the prospect of a bailout later -- a real taxpayer bailout,” House Natural Resources Chairman Rob Bishop said as his panel began considering the measure. “The failure to pass this bill will ensure that Congress becomes the financial backstop for Puerto Rico’s spending, but without the oversight that this bill institutes.”
Earlier in the day, Bishop said he expects lawmakers to pass the legislation with "good majorities from both parties," though it may not come until after the island’s July 1 deadline for a $2 billion payment to investors.
“This bill needs to come as quickly as possible to solve the problem,” Bishop of Utah said on Bloomberg Television. Asked whether July 1 was a hard deadline to pass the measure, he said, "No, not necessarily. We have to be further along in the bill, almost to passage by then,” to provide financial markets with the security of knowing it will pass, he said.
His committee is scheduled to continue its hearing on the revised plan Wednesday. It’s unclear whether it has enough support to clear the panel. The full House probably won’t vote on the bill until early June and it still has to be passed by the Senate.
One House Democrat, Luis Gutierrez of Illinois, who is of Puerto Rican descent, announced his opposition to the measure Tuesday in a letter to members of Bishop’s committee that said the control board is "still too powerful" and that there is "no logical reason to leave pension funds unprotected."
Lawmakers in both political parties are under pressure to vote against the measure. Republican-leaning groups like Heritage Action have said it doesn’t do enough to overhaul Puerto Rico’s economy. Labor unions are opposing it, arguing it doesn’t do enough to protect government workers’ pensions and that it allows cuts to the island’s minimum wage. Democratic presidential contender Bernie Sanders said last week he opposes the plan.
Still, the top Democrat on Bishop’s panel, Raul Grijalva of Arizona, plans to support it.
"He understands that there are Democratic concerns with the bill, but he’s been very involved with the negotiations over these past few months and understands that this bill is a compromise," said Grijalva’s spokeswoman, Diane Padilla. "It’s not the bill he would write, but Treasury has reassured him that it’ll help get the people of Puerto Rico back on their feet, which is what he ultimately wants."
Some Republicans on the panel say they still haven’t decided how they’ll vote and are skeptical about it.
“The heart of the problem is the massive amount of spending and the incredibly large number of government employees,” said Representative Louie Gohmert, a Texas Republican. “It doesn’t appear that this bill addresses that.”
"If we do not help to provide some structure, provide some oversight -- this is not a bailout -- but if we don’t step in and do those types of things, in the end, we will have to bail them out," said Representative Glenn Thompson of Pennsylvania.
Still, Representative Raul Labrador of Idaho, a committee member and co-founder of the conservative Freedom Caucus, said it “appears to be a good bill” although it could benefit from some changes in committee debate.