Lawmakers Introduce Bill to Help Puerto Rico's Debt Crisis
Lawmakers introduced a bill that restructures the island's $70 billion of debt.
— -- Lawmakers have introduced legislation to help Puerto Rico alleviate its massive debt crisis -- including allowing employers to pay less than the minimum wage during a specific time period.
U.S. Treasury secretary Jack Lew said he was "disappointed" that the measure didn't include some of the Obama administration's proposals, but called the legislation "a positive step in the right direction."
"We are pleased the bill reintroduced in the House last night includes restructuring tools for Puerto Rico that are comprehensive and workable," he said in a statement today.
The U.S. territory has been mired in a recession and weighed down by $70 billion in public debt. The island is likely to default on $2 billion in debt due on July 1.
Yesterday, lawmakers reintroduced a bill in the House that would let Puerto Rico restructure all of its liabilities and provide no bailouts for any creditors, Lew notes.
The Puerto Rico Oversight, Management, and Economic Stability Act, or PROMESA, addresses various aspects of the island's struggling labor market to make it easier for businesses to supposedly hire and keep workers.
For example, the bill says the Labor Department's new increase in the salary threshold for overtime pay won't apply in Puerto Rico. The bill also gives Puerto Rico's governor the authority to designate a time period in which employers could pay newly employed workers below the minimum wage, if those workers are under 25 years old. Any move to lower the minimum wage must be approved by an oversight board and would not apply to current workers.
Lew called out issues that the bill didn't address.
“We are disappointed the bill does not include our proposals to promote economic growth and provide a long-term Medicaid solution," Lew said in a statement today. "Additionally, there remain extraneous provisions in the bill, such as those regarding labor standards, which will not help address Puerto Rico’s debt crisis. However, the bill represents a fair, but tough bipartisan compromise."
Among the other contentious issues is the budgetary oversight board introduced in the bill. The board will be made up of seven people with three-year terms, but lawmakers are at odds over how the board would be appointed.
House Natural Resources committee chairman Rob Bishop, R-Utah, who has been leading negotiations for the bill, said he wanted to hold a markup of the bill next week or when the House returns in session the second week of June, Politico reported. A committee aide, who said there are "complicated technical and constitutional matters" to resolve, told ABC News there will likely be an announcement of a bill markup next week.