WASHINGTON (AP) - Congress delivered relief to debt-stricken Puerto Rico on Wednesday, sending President Barack Obama a last-minute financial rescue package to help the U.S. territory of 3.5 million Americans.
The Senate passed the bill on a bipartisan 68-30 vote, three weeks after the House overwhelmingly backed the measure. The vote came two days before the island is supposed to make a $2 billion payment to creditors. Obama is expected to move quickly and sign the legislation.
Puerto Rico is in a decade-long recession and has $70 billion in debt. Thousands have fled the territory for the U.S. mainland. Businesses on the island have closed, schools have struggled with limited electricity and hospitals have asked for cash payment in advance for some medication.
The White House and Republican and Democratic leaders in Congress have warned without help from Washington, the island could descend into economic chaos, with signs already pointing to a humanitarian crisis. In a rare feat of election-year unity, all four Republican and Democratic leaders in Congress supported the bill.
The legislation would create a control board to oversee the U.S. territory's finances and supervise some debt restructuring. It would not provide any direct financial aid to the territory, but leaders warned a bailout could eventually become necessary if Congress doesn't take this step.
"If we don't act before the island misses a critical debt payment deadline this Friday, matters will only get worse - for Puerto Rico and for taxpayers," warned Senate Majority Leader Mitch McConnell, R-Ky.
The control board would be similar to one that oversaw the District of Columbia in the late 1990s. Its seven members would oversee negotiations with creditors and the courts over reducing some debt. In addition to creating the board, the bill would require the territory to create a fiscal plan and fund public pensions, which the Puerto Rico government has shorted by more than $40 billion.
Gov. Alejandro Garcia Padilla has warned the U.S. territory would face multiple lawsuits if the bill is not approved, especially following today's anticipated default on $1 billion in general obligation bonds. The legislation would temporarily block creditor lawsuits from being filed until February 2017.
The general obligation bonds are backed by the island's constitution, but Garcia has said the government has no money to honor that debt despite the implementation of new taxes and recent increases in utility rates. Garcia hasn't said if the island will default on the other $1 billion due.