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| Treasury Official Urges Quick Action on Puerto Rico Rescue | Treasury Official Urges Quick Action on Puerto Rico Rescue |
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| WASHINGTON — Skeptical lawmakers at the House Natural Resources Committee heard testimony Wednesday on a plan to rescue Puerto Rico, as witnesses warned that only quick action by Congress could keep a bad situation from becoming a lost decade. | WASHINGTON — Skeptical lawmakers at the House Natural Resources Committee heard testimony Wednesday on a plan to rescue Puerto Rico, as witnesses warned that only quick action by Congress could keep a bad situation from becoming a lost decade. |
| Antonio Weiss, the counselor to the Treasury secretary, told lawmakers “everybody loses” if Congress fails to intervene in time and Puerto Rico defaults on big debt payments in the coming weeks. | Antonio Weiss, the counselor to the Treasury secretary, told lawmakers “everybody loses” if Congress fails to intervene in time and Puerto Rico defaults on big debt payments in the coming weeks. |
| On Tuesday the committee’s draft bill was introduced in the House, proposing to put Puerto Rico under a seven-member federal oversight board and give it extraordinary powers to wipe out debt, something normally available only in bankruptcy. Under existing law, Puerto Rico is barred from declaring bankruptcy. | On Tuesday the committee’s draft bill was introduced in the House, proposing to put Puerto Rico under a seven-member federal oversight board and give it extraordinary powers to wipe out debt, something normally available only in bankruptcy. Under existing law, Puerto Rico is barred from declaring bankruptcy. |
| “This legislation is not a bailout,” Mr. Weiss added, “but if things go bad it could turn into one.” | “This legislation is not a bailout,” Mr. Weiss added, “but if things go bad it could turn into one.” |
| The situation has created a sense of urgency in Washington as well as in San Juan, though the drafting of the bill has drawn criticism from all sides. The island has a $422 million debt payment due on May 1, and is running out of cash. It has already defaulted on several smaller debt payments, and $2 billion more is due in July. | The situation has created a sense of urgency in Washington as well as in San Juan, though the drafting of the bill has drawn criticism from all sides. The island has a $422 million debt payment due on May 1, and is running out of cash. It has already defaulted on several smaller debt payments, and $2 billion more is due in July. |
| Mr. Weiss said there were still parts of the bill that he did not support, but he urged the committee to repair them quickly so that Congress could put a legal framework in place in time for the coming debt payment deadlines. Otherwise, he and other witnesses said, a default could plunge Puerto Rico into an abyss. | Mr. Weiss said there were still parts of the bill that he did not support, but he urged the committee to repair them quickly so that Congress could put a legal framework in place in time for the coming debt payment deadlines. Otherwise, he and other witnesses said, a default could plunge Puerto Rico into an abyss. |
| “There will be endless litigation,” he warned. “We fear economic chaos.” | “There will be endless litigation,” he warned. “We fear economic chaos.” |
| Puerto Rico has a total $72 billion of debt outstanding, most of it in the form of municipal bonds. It also owes at least $43 billion of government pensions that are almost entirely unfunded. It has stopped paying some of its vendors, and it risks losing its ability to provide essential services such as hospital care, clean water and electricity. | Puerto Rico has a total $72 billion of debt outstanding, most of it in the form of municipal bonds. It also owes at least $43 billion of government pensions that are almost entirely unfunded. It has stopped paying some of its vendors, and it risks losing its ability to provide essential services such as hospital care, clean water and electricity. |
| The House committee’s chairman, Rob Bishop of Utah, had put the rescue bill on a fast track. However, in a statement late Wednesday afternoon, he said he had adjourned the committee so it could consider proposed amendments, saying the administration was still negotiating on key provisions and members needed time to understand the complexities of the issue and the ramifications of any proposed changes. | The House committee’s chairman, Rob Bishop of Utah, had put the rescue bill on a fast track. However, in a statement late Wednesday afternoon, he said he had adjourned the committee so it could consider proposed amendments, saying the administration was still negotiating on key provisions and members needed time to understand the complexities of the issue and the ramifications of any proposed changes. |
| Paul D. Ryan, the speaker of the House, announced his support for the legislation on Tuesday, saying, “This bill protects American taxpayers from bailing out Puerto Rico.” | Paul D. Ryan, the speaker of the House, announced his support for the legislation on Tuesday, saying, “This bill protects American taxpayers from bailing out Puerto Rico.” |
| But lawmakers on the committee showed little enthusiasm. | But lawmakers on the committee showed little enthusiasm. |
| Republicans complained that no matter what they were being told, the bill still seemed like a bailout for Puerto Rico. | Republicans complained that no matter what they were being told, the bill still seemed like a bailout for Puerto Rico. |
| Representative John Fleming, a Louisiana Republican, said that even if taxpayers did not have to pay for the initial debt restructuring, they would probably have to sponsor costly subsidies or other measures to stimulate the economy. | Representative John Fleming, a Louisiana Republican, said that even if taxpayers did not have to pay for the initial debt restructuring, they would probably have to sponsor costly subsidies or other measures to stimulate the economy. |
| “What is the next shoe to drop?” he said. “There is going to have to be a cash bailout.” | “What is the next shoe to drop?” he said. “There is going to have to be a cash bailout.” |
| Tom McClintock, a Republican of California, said he thought that if Puerto Rico got the ability to wipe out debt, it would send a frightening signal to bond investors that Congress might also give such powers to troubled states. “Taxpayers are going to end up shouldering those burdens by paying much higher interest rates,” he said. | Tom McClintock, a Republican of California, said he thought that if Puerto Rico got the ability to wipe out debt, it would send a frightening signal to bond investors that Congress might also give such powers to troubled states. “Taxpayers are going to end up shouldering those burdens by paying much higher interest rates,” he said. |
| Democrats also criticized the bill. | Democrats also criticized the bill. |
| Norma J. Torres, a California Democrat, said she was troubled by a provision that would lower the legal minimum wage in Puerto Rico to $4.25 an hour for people in the first five years of their careers. She said she thought employers might misuse this provision, dumping workers as soon as they completed five years and replacing them with low-cost new workers. | Norma J. Torres, a California Democrat, said she was troubled by a provision that would lower the legal minimum wage in Puerto Rico to $4.25 an hour for people in the first five years of their careers. She said she thought employers might misuse this provision, dumping workers as soon as they completed five years and replacing them with low-cost new workers. |
| “Is this going to create a two-class type of employment?” she asked. “Will older ones be the first to be laid off?” | “Is this going to create a two-class type of employment?” she asked. “Will older ones be the first to be laid off?” |
| Mr. Weiss said that emigration was a problem for Puerto Rico and that he shared her concerns. |