The Senate on Wednesday advanced a measure that would allow Puerto Rico to restructure $72 billion in debt under a federally appointed control board that would also reform the government, despite objections from both Republicans and Democrats.
Sixty votes were needed to advance the bill, and the Senate voted in favor of doing so, 68-32.
The measure now heads to the floor for debate and likely final passage by the end of the week, ahead of a critical deadline the U.S. territory must meet. Puerto Rico owes a $2 billion payment creditors on July 1 and faces lawsuits from creditors if it defaults.
The legislation would install a control board that would have the power to restructure the island’s debt, which proponents say would stave off an economic crash.
“We must help Puerto Rico before July 1, otherwise we turn that Island Nation over to the hedge funds and they’ll sue them to death,” said Senate Minority Leader Harry Reid, D-Nev. “We must do something now.”
The legislation was the product of intense, weeks-long negotiations between lawmakers in both parties and the White House, which helped the deal earn President Obama’s endorsement.
Democratic leaders on Wednesday lamented provisions in the bill they oppose, but said they would support the deal as a last-ditch rescue effort ahead of a looming debt payment deadline and the threat of an economic catastrophe.
“We are trying to find a reasonable way through this that will appeal to both political parties,” said Senate Minority Whip Richard Durbin, D-Ill. “What we have before us is a compromise.”
Lawmakers from both parties criticized the bill before the vote, including Rep. Bob Menendez, D-N.J., who argued against the measure on the Senate floor for four hours on Tuesday.
Menendez said Wednesday that the Senate should not just endorse the House-passed legislation, but should improve it with amendments.
Menendez said the legislation disenfranchises 3.5 million Puerto Rican citizens who would be governed by an “unelected, unchecked and unaccountable” control board.
Menendez also decried provision in the bill exempting the island from minimum wage, overtime and collective bargaining requirements.
Sen. Rob Portman, who was among the GOP lawmakers who opposed the bill, voted against it because he was not permitted an amendment that would have protected the dwindling pensions of retired coal miners affected by the shuttered mines.
“If we’re going to help Puerto Rico escape bankruptcy, then we should also help the 90,000 miners we talked about in West Virginia, Ohio, and other states who are suffering the effects of these coal bankruptcies,” Portman said.
