Congress OKs rescue aid for Puerto Rico

Last-minute vote helps island deal with its creditors

Congress delivers relief to debtstricken Puerto Rico, sending President Barack Obama a last-minute rescue package to help the territory of 3.5 million Americans.

WASHINGTON — Congress delivered relief to debt-stricken Puerto Rico on Wednesday, sending President Barack Obama a last-minute financial rescue package to help the U.S. territory of 3.5 million Americans.

The Senate passed the bill on a bipartisan 68-30 vote, three weeks after the House overwhelmingly backed the measure. The vote came two days before the island is supposed to make a $2 billion payment to creditors.

Puerto Rico is in a decadelong recession and has $70 billion in debt. Thousands have fled the territory for the U.S. mainland. Businesses on the island have closed and schools have struggled with limited electricity.

The White House and Republican and Democratic leaders in Congress have warned that without help from Washington, the island could descend into economic chaos, with signs already pointing to a humanitarian crisis.

In a rare feat of electionyear unity, all four Republican and Democratic leaders in Congress supported the bill, which would create a control board to oversee the U.S. territory’s finances and supervise some debt restructuring.

Obama said after the vote that he would sign the bill and commended Congress for passing it.

“This bill is not perfect, but it is a critical first step toward economic recovery and restored hope for millions of Americans who call Puerto Rico home,” Obama said.

The legislation would not provide any direct financial aid to the territory, but leaders warned that a bailout could eventually become necessary if Congress didn’t take this step.

The control board would be similar to one that oversaw the District of Columbia in the late 1990s. Its seven members would oversee negotiations with creditors and the courts over reducing some debt. In addition, the bill would require the territory to create a fiscal plan and fund public pensions, which the Puerto Rico government has shorted by more than $40 billion.

Gov. Alejandro Garcia Padilla said that with passage of the bill, “we are starting to take the island back from creditors and giving it to Puerto Ricans.” He has warned the U.S. territory would face multiple lawsuits if the bill was not approved, especially following Friday’s anticipated default on $1 billion in general obligation bonds. The legislation would temporarily block creditor lawsuits until February 2017.