Puerto Rico's House of Representatives approved legislation to reform its highly indebted public utility company "PREPA." The utility company's investors want the reform package before they approve a debt restructuring deal that includes a 15 percent cut in repayments. The bill passed the island's Senate but was amended in the House so will now head back to the Senate for another vote. Puerto Rico is likely to get an extension from lenders on a midnight February 16 deadline to pass the legislation.
"While the deal does offer some relief, it's hardly a model to deal with the island's debt," stated Eric LeCompte, executive director of the religious development coalition Jubilee USA. "If we saw a broader deal along these lines it would fail to bring Puerto Rico's debt back to sustainable levels."
PREPA's $8 billion debt is part of the portion of Puerto Rico's debt impacted by the island's exclusion from Chapter 9 of the US bankruptcy code. Both Republicans and Democrats in Congress have introduced legislation to extend Chapter 9 to Puerto Rico. The US House of Representatives' Natural Resources Committee is drafting legislation to address Puerto Rico's debt crisis and will hold its third hearing on the issue February 25.
"It's clear we are now in a critical stage of this crisis," noted LeCompte, who testified at the Natural Resources Committee's February 2 hearing. "Congress can't stand on the sidelines any longer."
Jubilee USA Network is an alliance of more than 75 US organizations and 550 faith communities working with 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org