Puerto Rico legislative solution nears, House hearings due

[February 25, 2016]  By Megan Davies
 
 NEW YORK (Reuters) - A legislative solution for Puerto Rico may be edging closer as the debt-ridden U.S. territory will be the subject of two congressional hearings on Thursday, following which legislation to try and find a fix for the island is expected to be drawn up.

Puerto Rico, with $70 billion debt, wants access to a bankruptcy-like mechanism to reduce debt - a view supported by President Barack Obama's administration and some Congressional Democrats. But majority Republicans have not supported such efforts to extend bankruptcy protection to the island - a strategy which could be detrimental to some creditors - and are keen to put Puerto Rico under strict fiscal oversight.

There have been a series of hearings on Puerto Rico in recent months in both the U.S. House of Representatives and the Senate. On Thursday, there will be two hearings at 10 a.m. EST (1500 GMT), which are expected to be the last before a concerted effort to draw up legislation.

House Speaker Paul Ryan has said he wants the Republican-led House to come up with a response to Puerto Rico's fiscal crisis during the first quarter of 2016 and Republicans plan to bring a bill addressing Puerto Rico's debt crisis to the floor of the House by the end of March.

Thursday's hearings are in front of the House Natural Resources Committee and the Financial Services Committee.

U.S. Treasury Secretary Counselor Antonio Weiss will be the sole witness at the Natural Resources hearing.

However, any legislation could be difficult to achieve.

“I see it at a 50 percent (chance) that nothing will be approved, or a 50 percent (chance) that what is finally approved won't help (Puerto Rico)," said former Governor Anibal Acevedo Vila, who said that he opposed efforts to impose a fiscal board on the island.

"It is a solution just to pay the debt, not to foster economic development for Puerto Rico," Acevedo Vila said.

Legislation for Puerto Rico could potentially be written as a stand-alone law - which carries the risk of having little momentum to approve it - or attached to a bill related to the Federal Aviation Administration (FAA), a congressional source said.

An FAA authorization bill which authorizes funding for the agency could come up for a vote in the House of Representatives as early as next month.

(Reporting by Megan Davies; Additional reporting by David Morgan in Washington and Nick Brown in San Juan; Editing by Lisa Shumaker)

[© 2016 Thomson Reuters. All rights reserved.]

Copyright 2016 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.