WASHINGTON — Congress seems increasingly unlikely to take action to help Puerto Rico ahead of a May 1 deadline for the commonwealth to default on a nearly half-billion-dollar debt payment.
The blown deadline could push Puerto Rico and its 3.5 million American citizens further into crisis, exacerbating a growing fiscal and humanitarian disaster that’s been largely drowned out by the raucous political campaign season on the mainland.
A GOP-led House committee abruptly canceled a vote on a Puerto Rico debt restructuring bill when it was short of votes last week. The bill is still being rewritten, and as of yet the vote has not been rescheduled, Natural Resource Committee Chairman Rob Bishop, R-Utah, said Tuesday.
“I’m not sure that on May 2 Armageddon takes place, but clearly I think it will illustrate that there is a significant problem,” Bishop told reporters. “There are still some people out there saying there’s not a problem… No, there is a problem, they will default on some portion.”
Years of mounting fiscal problems are coming due on the island where residents are U.S. citizens but are barred from voting in presidential general elections. Tax policies written in Washington made matters worse in recent years by forcing investments and jobs out of Puerto Rico. Puerto Rico has been missing debt payments for months, but on May 1 another $422 million worth of general obligation bonds come due and $780 million more on July 1.
Bishop’s legislation creating a new control board to manage the territory’s finances has run into election-year opposition from all sides in Washington. Some conservatives are suspicious it would open the door to a bailout, Democrats are balking at provisions added to sweeten the deal for conservatives, outside groups are weighing in, a high-spending ad campaign has opposed congressional action, and infighting among different groups of creditors has sown confusion on Capitol Hill .
With the bill still undergoing revisions, committee action is unlikely before next week at earliest. That makes final passage through the House and the Senate all but impossible before month’s end.
Democrats blame Congress’ failure to act on long-standing divisions among House Republicans who’ve failed to unite despite the leadership of their popular new speaker, Paul Ryan of Wisconsin. Ryan has sought to return power to committee chairmen and rank-and-file lawmakers, but on the Puerto Rico bill and other matters, the approach has yet to yield results.
“Puerto Rico is a crisis and they’re not responding,” said Rep. Steny Hoyer of Maryland, the No. 2 House Democrat, pointing to statistics showing high levels of unemployment and poverty in the territory as taxes rise and schools close. “They confront the same problem that John Boehner confronted, a very significant number of their party that won’t follow leadership,” Hoyer added, naming the former House speaker who was ousted by conservatives and replaced by Ryan.