The Senate approved legislation on Wednesday that U.S. Rep. Sean Duffy (R-WI) introduced to resolve Puerto Rico’s debt crisis by enabling the territory to restructure its $72 billion debt.
The bill was then signed by President Barack Obama on Thursday.
The Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), S. 2328, enables Puerto Rico to maintain self governance while providing oversight and holding the territory accountable for its debt.
“When I started working to fix the Puerto Rico debt crisis, I knew it wouldn’t be easy, but we built a bipartisan coalition to help the three and half million Americans who have been suffering under the weight of bad financial decisions by leaders who made promises they couldn’t afford or keep,” Duffy said. “That’s why I’m so appreciative of my friends in the Senate for working quickly, in a bipartisan fashion, to address this crisis.”
PROMESA establishes the Oversight Board and Congressional Task Force on Economic Growth, Duffy said, to promote balanced budgets and economic opportunities for Americans living in Puerto Rico.
U.S. Rep. Rob Bishop (R-UT), the chairman of the House Natural Resources Committee, said that Puerto Rico has been in “dire straits” with a decade-long recession, worsening humanitarian conditions and causing a mass exodus of residents due to “looming financial collapse.”
“Inaction by Congress would have jeopardized the well-being of U.S. citizens on the island and the investments of countless Americans across the country,” Bishop said. “We have a moral and constitutional obligation to extend a lifeline to Puerto Rico. (On Wednesday), Congress fulfilled that obligation.”
Hard decisions remain for Puerto Rico’s leaders, Bishop added, but PROMESA will provide a framework for the commonwealth to restore accountability and impose fiscal discipline.