Politics

Senate Approves Puerto Rico Rescue, Sends to Obama

Bill would set path for territory's restructuring debt, establish oversight board

New Jersey Sen. Robert Menendez, left, seen here with Illinois Rep. Luis V. Gutiérrez at a May news conference on the Puerto Rico rescue bill, which he has called "neo-colonialism." (Tom Williams/CQ Roll Call file photo)

The Senate on Wednesday approved legislation aimed at rescuing Puerto Rico from its debt crisis, and President Barack Obama said he would sign it.  

Although the measure passed easily, 68-30, there was strong opposition from some Democrats, including Robert Menendez, D-N.J., who said the action treated the people of Puerto Rico "like subjects, not citizens."  

Passage occurred just two days before the territory was expected to default on a $2 billion debt payment.  

The package would put a halt to creditor lawsuits against the island and would provide a pathway for debt restructuring. It would also establish a seven-member oversight board to manage the island’s finances.  

Pledging to sign it, Obama said the legislation wasn't perfect. "But it is a critical first step toward economic recovery and restored hope for millions of Americans who call Puerto Rico home," he said in a statement.  

Both parties had lobbied members heavily to support the bill, a version of which passed the House, 297-127, on June 9, after lengthy, bipartisan negotiations.  

The Obama administration sought Democratic support in recent days, as Treasury Secretary Jacob J. Lew made several Capitol Hill trips to woo lawmakers , warning of “chaos” if a bill was not passed. The governor of Puerto Rico, Alejandro Garcia Padilla, was also on Capitol Hill lobbying members.  

[ Treasury Secretary Pushes for Puerto Rico Vote ]  

Sen. Ron Wyden  said that he had only made up his mind Tuesday. The Oregon Democrat emerged from a meeting with Lew saying that while the bill was flawed, he saw no time to improve it before the critical Friday deadline.  

“I’m not going to let the adequate be the enemy of the barely sufficient,” Wyden said.  

Senate Majority Leader Mitch McConnell of Kentucky addressed concerns from some that the bill would amount to a “bailout.” Indeed, an intense advertising campaign this spring from a group known as the Center for Individual Freedom had described the rescue package as such.  

“It won't cost taxpayers a dime,” McConnell said. “It prevents a bailout. And it offers Puerto Rico the best chance to return to financial stability and economic growth over the long term so we can help prevent another financial crisis like this in the future.”  

That fiscal oversight board that would be created by the bill rankled many Democrats, who also objected to provisions like one that would allow the governor of Puerto Rico to lower the minimum wage for some young workers and also block workers from a new overtime rule issued by the Labor Department.  

“The legislation before us is far from perfect. Oh, is it far from perfect,” Senate Minority Leader Harry Reid of Nevada said ahead of the vote, taking note of those provisions. “I share my colleagues' really deep concerns about this compromise legislation.”  

This week, senators from coal-mining states threatened to hold up an urgent aid package for Puerto Rico, unless they were assured a vote on a mine worker pension bill.  

[ Coal State Senators Seek to Link Puerto Rico to Miners Pensions ]  

Senate Majority Whip John Cornyn said the pension measure would likely need to go through a hearing in the Finance Committee, and would probably not be attached as an amendment to any pending legislation. "They want their problem addressed, and they’re entitled to have it addressed," the Texas Republican said.

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