WASHINGTON (Reuters) - U.S. Treasury Secretary Jack Lew on Monday called on the Senate to take immediate action this week to address Puerto Rico's $70 billion debt crisis before the critical July 1 deadline for the island territory's next debt payments.

"The Senate should take up the matter immediately," Lew said in a letter to Senate Majority Leader Mitch McConnell. "Delay will only jeopardize the ability of Congress to conclude its work before July 1, a critical deadline Puerto Rico's leadership has publicly highlighted for months."

If no action is taken, the crisis there will only ratchet higher, he said in the letter. Puerto Rico faces a deadline on Friday to pay off $2 billion of its debts.

Senator James Inhofe of Oklahoma, chairman of the Senate Environment and Public Works Committee, said later in a floor speech that the vote would take place on Wednesday. "I really do think that we can go ahead and support the bill," he said.

A senior Republican aide could not confirm that a vote would take place on Wednesday.

The financially ailing island is staring down $70 billion worth of debt that it says it cannot repay in full, adding to its 45 percent poverty rate and rising emigration to the U.S. mainland that is also cutting into its economic growth.

The Republican-led U.S. House of Representatives already passed legislation to address Puerto Rico's debt before leaving Washington for the July 4 holiday break. The Senate is expected to recess at the end of this week.

The House bill, a rare piece of bipartisan legislation, would establish a federal oversight board to negotiate various debt restructurings while seeking to institute balanced budgets on the island, a U.S. territory with 3.5 million residents.

Lew called on senators to also pass the House measure - the "Puerto Rico Oversight, Management and Economic Stability Act," or PROMESA - this week to get it to President Barack Obama to sign into law before Friday's payment deadline.

The Senate, also controlled by Republicans, is expected to debate the measure this week, but Democrats have said they want changes - a move that could complicate its passage. A vote is expected this week.

(Reporting by Susan Heavey and Dan Bases, additional reporting by David Morgan; editing by Chizu Nomiyama and Andrew Hay)