WASHINGTON (AP) – Puerto Rico is facing a deadline for a multimillion-dollar bond payment next month as House Republicans struggle to find a way to help the island deal with its $70 billion debt.
A House committee canceled a Thursday vote on the issue as Republicans were divided on how Congress should weigh in. Gov. Alejandro Garcia Padilla has warned that a debt restructuring measure needs to be approved soon as the deadline for a $422 million bond payment looms in May.
Puerto Rico has said it will likely default on the payment, which would mark the first time the island would default on general obligation bonds protected by the island’s constitution.
Obama administration officials warned at a hearing Wednesday that the island is facing total financial collapse if Congress doesn’t step in. Republicans agree on the urgency of the matter, but they have faced opposition from within their own caucus and from Democrats.
Legislation released by the panel this week would create a control board and allow the board to facilitate some court-ordered debt restructuring, though it does not give the island the broad bankruptcy authority that territorial officials had sought.