On Wednesday, the legislation to assist Puerto Rico in solving its debilitating debt crisis hit new opposition in the US Congress. Reports say that this might prompt the Republicans to cancel a proposed work session on the measure that was scheduled for Thursday.
New York Times reported that the legislation to help Puerto Rico restructure its $72 billion debt was introduced in the Congress on Tuesday. The content of the measure showed several revisions written in by hand, suggesting that legislators had engaged in last-minute efforts to balance competing interests. While many Republicans expressed concerns over any measure that might be seen as a taxpayer bailout, the Democrats have been calling on the Congress to help the struggling country.
The measure would give Puerto Rico a certain authority that is commonly available only on bankruptcy. The bill will undergo final amendments on Thursday before it will be sent for debate on the floor of the House next week.
However, Chairman Rob Bishop said in a statement that the House Natural Resources Committee's planned legislation unveiled on Tuesday was called off. Bishop said that President Barack Obama's legislation was still negotiating provisions, reports Reuters. He also said that it would be "unfair" to all members to force a vote while the discussions are still ongoing.
According to Market Watch, the final treatment of different bonds will hugely depend on the deal reached between Puerto Rico and its main creditors during the upcoming negotiations. The Bank of America predicted that the creditors will likely legally challenge the measure in short order.
One of the congressional aides said that the abrupt move was executed since there was not enough support among panel members to get the bill approve. It is still unclear at the moment when the committee would reschedule a work session.
A US Treasure official told the committee that the House should allow Puerto Rico to erase a share of its debt or investors will have to face a long and uncertain fight to recover their finances from the cash-strapped island.
