Relief for Puerto Rico is near.
On Thursday evening, the U.S. House of Representatives overwhelmingly passed a bill to aid the island. Puerto Rico is struggling to pay back $70 billion in debt and find a way out of a deep downturn. The economic situation is so dire that Puerto Ricans are literally fleeing the island at a rate not seen since the 1950s “West Side Story” era.
The bill is being hailed as a bipartisan compromise. President Obama and Hillary Clinton both support it, as does Republican House Speaker Paul Ryan.
“Today the House acted to prevent Puerto Rico’s fiscal crisis from escalating to a humanitarian catastrophe,” said Rep. Rob Bishop, a Republican from Utah who helped to draft the bill.
Related: Puerto Rico’s crisis: How did it get so bad?
The bill known as PROMESA, the Spanish word for “promise,” passed the House with a vote of 297 to 127. It creates an Oversight Board to control the island’s finances. The board would also have special abilities to restructure the island’s $70 billion in debt, but only as a last resort.
Puerto Rico says it is out of money and can’t pay its creditors. The island has already defaulted three times in the past year. A big payment of nearly $2 billion is due July 1.
If the U.S. Senate moves quickly to pass PROMESA, Puerto Rico may not have to make the full July payment to creditors. Under the terms of the bill, Puerto Rico would get a grace period through at least February 2017 where it would only have to pay interest on its debts and creditors could not sue.
The idea is to give the Oversight Board time to come up with a plan.
“The Senate should act expeditiously to review and vote on this measure, so the president can sign the bill into law ahead of the critical July 1st debt payment deadline,” the White House said in a statement Thursday.
PROMESA also gives the Oversight Board the ability to sell Puerto Rican government assets, and it would allow the island to temporary lower its minimum wage for some workers.
CNNMoney (New York) First published June 9, 2016: 7:06 PM ET