Senate prepares Puerto Rico debt debate amid Democrats’ concerns

By Richard Cowan

WASHINGTON (Reuters) – U.S. Senate Democratic leader Harry Reid said on Tuesday that amendments were necessary to a Puerto Rico debt bill that Senate Majority Leader Mitch McConnell said would be voted on by next week.

Reid, speaking to reporters, said changes were needed to the federal board overseeing the restructuring of Puerto Rico’s $70 billion debt under the bill, but he did not say whether Democrats would be successful in making any changes.

The House of Representatives passed a Puerto Rico debt relief bill on June 9, following months of internal debate. Supporters hope the Senate passes that bill, without any amendment, before July 1, when Puerto Rico faces a deadline for making a $1.9 billion debt payment.

The Caribbean island, which is a U.S. territory, is suffering a poverty rate of about 45 percent and has been hobbled by worsening debt problems. Some schools and medical facilities are closing and thousands of residents are relocating to the U.S. mainland, further shrinking Puerto Rico’s tax base.

While Reid said he had “some serious concerns” with the current bill, which was negotiated by the Obama administration and lawmakers in the House, he did not say whether he expected any amendments to succeed in the Senate.

A Senate debate over amendments could simply help put Democrats on record registering their concerns with the legislation.

“At the very minimum, we need some amendments to make sure that people understand what is not in that bill,” Reid said.

Democrats in both chambers have voiced concerns over some potential minimum-wage reductions for young workers that Republicans included in the House bill.

They also have said the federal oversight board, to be appointed by Washington, might not have Puerto Rico’s best interests in mind.

Supporters of the bill have argued it is the best measure that can pass the Republican-controlled Congress and that Puerto Rico could slip into chaos without action.

(Reporting by Richard Cowan; Editing by Chris Reese and Peter Cooney)