By Richard Cowan and Daniel Bases

WASHINGTON/NEW YORK (Reuters) - After months of waiting for the U.S. Congress to act as Puerto Rico's economic crisis progressively worsened, the Caribbean island is on the verge of securing a relief plan from Washington aimed at helping it address a hobbling $70 billion debt.

The Senate is set to launch a debate on Wednesday for legislation establishing a federal oversight board that would be in charge of restructuring the U.S. territory's debt where one out of every three dollars it earns in revenue is used to pay creditors, according to the U.S. Treasury.

"We're not going to let Puerto Rico go off the cliff here. It's too important," said Republican Senator Marco Rubio of Florida.

The measure is identical to the plan passed by the House of Representatives earlier this month, as Congress tries to send it to President Barack Obama to sign into law by July 1. That is when Puerto Rico faces a potential default on a chunk of its debt if it cannot make a $1.9 billion payment.

As early as Wednesday, the Senate could cast a procedural vote on the bill that, if successful, would clear the measure for passage this week. Senate Majority Leader Mitch McConnell also took steps to limit amendments that can be offered to the bill.

Some Democrats have complained about the makeup and operation of the oversight board that would be appointed by Washington as well as provisions demanded by House Republicans that potentially could lower minimum wages for some younger workers.

"Something needs to be done. We would really love some amendments on key issues like the composition of the board, the procedures for taking Puerto Rico into the bankruptcy court, and then especially, the labor provisions on overtime and minimum wage," Democratic Senator Tim Kaine of Virginia told reporters.

But any amendments would delay Congress' work on the bill and make it impossible to get to Obama before July 1, as the House of Representatives would have to sign off and it is in recess until July 5, after the Independence Day holiday weekend.


U.S. Treasury Secretary Jack Lew reiterated his call for the Senate to pass the bill on Monday, saying if nothing is done by the Friday deadline, the debt crisis will only ratchet higher.

Puerto Rico is reeling from a 45 percent poverty rate, a steady flow of outward migration to the U.S. mainland that further shrinks its tax base and the shuttering of essential services.

If Congress does not pass the "Puerto Rico Oversight, Management and Economic Stability Act," or PROMESA, before July 1, the island could default on all or part of the debt payment, including General Obligation bonds that are senior to all credits.

"The Senate should take up the matter immediately," Lew said in a letter to 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."

While Puerto Ricans want some sort of relief from the debt their government is saddled with, many of the 3.5 million residents, who are U.S. citizens, nonetheless worry that the proposed seven-member oversight board will trample on San Juan's self-governing rights.

"The bill is not perfect. I do not like the board. I do not like that it doesn't add a mechanism to make our economy grow, but what is the alternative right now? That is why I call on the Senate to vote for this bill," Puerto Rican Governor Alejandro Garcia Padilla said during a panel discussion last week in Washington.

Without PROMESA, an existing trickle of lawsuits could turn into a flood.

In April when there was little sign of congressional action, Puerto Rico's legislature passed a local debt moratorium law giving Garcia Padilla the authority to withhold debt payments.

Investors on June 21 filed a lawsuit in U.S. federal court calling the Puerto Rico Emergency Moratorium and Rehabilitation Act illegal.

"We are at the mercy of the judge," Garcia Padilla said during the panel discussion.

PROMESA, if signed into law, puts an immediate stay, or hold, on any future lawsuits and is retroactive to December 2015. The stay remains in effect until the debt has been restructured to a sustainable level with the goal being an orderly restructuring an sustainable amount of debt.

(Reporting by Richard Cowan in Washington and Daniel Bases in New York, additional reporting by Susan Cornwell in Washington; editing by Chris Reese and G Crosse)