House GOP tries to find consensus on help for Puerto Rico

In this Wednesday, July 29, file 2015 photo, the Puerto Rican flag flies in front of Puerto Rico's Capitol as in San Juan, Puerto Rico.

The U.S. Congress was ironing out a new plan on Wednesday to rescue Puerto Rico from crippling debts that threaten the island territory's funding for hospitals and emergency services, as the treatment of bondholders simmers as a point of contention.

WASHINGTON (AP) - Puerto Rico is facing a deadline for a multimillion-dollar bond payment next month as House Republicans struggle to find a way to help the island deal with its $70 billion debt.

The board would have the power to decide if restructuring of Puerto Rico's debt is necessary, though it would not give the island the bankruptcy authority it sought.

In drafting that proposal, GOP lawmakers have tried to satisfy Puerto Rico's government, creditors and some conservatives.

House Minority Leader Nancy Pelosi, D-Calif., said that the bill should include an oversight board "that is respectful of the people of Puerto Rico and does not undermine the restructuring part of the bill and does not contain extraneous provisions that harm working people".

Governor Alejandro Garcia Padilla last week signed legislation giving him discretion to impose a moratorium on the island's debt payments.

Still, several Republicans expressed concern at the hearing about the debt restructuring, making the outcome of Thursday's committee vote unclear.

At issue is just how powerful the control board should be.

In a statement released late Tuesday, Pelosi said the Republicans' proposal needs changes "to improve the makeup and scope of the board and streamline the restructuring process to make it more workable".

The House Republican Study Committee, a group of around 170 conservatives, had expressed concerns about the debt restructuring provisions.

They also want Mr. Bishop's bill to protect islanders' pensions and to delete language that would lower Puerto Rico's hourly minimum wage from $7.25 to $4.25. Republican Rep. Bill Flores of Texas, head of that group, said Tuesday that its members are still reviewing the new version of the legislation, "but we are encouraged that there appear to be some improvements".

"I am concerned, however, that this bill fails to address the underlying and systemic challenges that led to Puerto Rico's current debt crisis". The territory's financial problems grew worse as a result of setbacks in the wider USA economy, and government spending in Puerto Rico continued unchecked as borrowing covered increasing deficits.

Treasury Department official Antonio Weiss said prompt action was needed because Puerto Rico is in distress.

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