Senate Majority Whip John Cornyn backed the House-passed Puerto Rico rescue legislation, dubbing the package "an anti-taxpayer bailout bill" in advance of an expected vote this week.
"If we don't pass this Puerto Rico bill, when July 1 hits and there is a major default, then there is going to be a demand that we use taxpayer dollars to bail out out Puerto Rico," Cornyn told reporters Monday afternoon. "And to me, this is an anti-taxpayer bailout bill as much as it is anything else."
Puerto Rico is poised to default on $2 billion of debt protected by the territory's constitution. A bipartisan majority of the House passed a rescue package that would delay the legal obligation to make those payments long enough for an independent oversight board to review island government's finances.
The legislation also allows Puerto Rico to restructure its debt, despite the fact that many of the loans were made with the understanding that the island government was barred from taking such debt reduction steps. That has prompted some conservatives to regard the bill as a "bailout" — a politically-toxic label that evokes the taxpayer-funded bailouts of Wall Street banks and the auto industry in 2008 and 2009.
House Minority Leader Nancy Pelosi, D-Calif., supported the bill, but other Democrats oppose it precisely because it doesn't provide Puerto Rico with a cash infusion. "Everything is 'get your finances in order,'" Rep. Luis Gutierrez, D-Ill., told the Washington Examiner. "When other people have issues and problems, the Congress of the United States contributes to the resolution of them."
The Senate is expected to take up the bill, but it is unclear whether the bill has enough support to clear a 60-vote threshold, in part because some Senate Democrats are demanding amendments to weaken the control board and eliminate some other provisions, such as one granting the island governor the power to issue temporary exemptions to federal minimum wage law.
"Hopefully, we're going to get a chance for amendments," Sen. Bob Menendez, D-N.J., told Politico.
Any amendments would force Congress to miss the July 1 deadline for getting a Puerto Rico bill to the president's desk, however, because the House doesn't come back into session until July 5. "In the event of default, and if creditor lawsuits are successful, a judge could immediately order Puerto Rico to pay creditors over essential services such as health, education, and public safety," Treasury Secretary Jack Lew wrote in a letter to Senate Majority Leader Mitch McConnell. "Even a retroactive stay on litigation passed by Congress a few days later would not reverse such a court order."