(Washington, DC) – U.S. Senator Richard Blumenthal (D-Conn.), Senator Elizabeth Warren (D-Mass.), Senate Democratic Leader Harry Reid (D-Nev.) and Senator Charles E. Schumer (D-NY) introduced the Puerto Rico Emergency Financial Stability Act. This legislation would establish a short-term stay on creditor litigation until Congress takes action to allow Puerto Rico to restructure its debts.
“Puerto Rico desperately needs this short term financial tourniquet to stop its fatal bleeding, even as we fight for a real cure. If Congress waits until a messy and disruptive default has begun, the price of addressing the crisis-in both dollars and human suffering of our fellow Americans in Puerto Rico-will be immense and irreparable. Puerto Rico has already missed a debt payment to one class of creditors and indicated that it will be unable to make payments to others. By year's end, Puerto Rico could face expensive and unnecessary creditor lawsuits as a result of its lack of access to an orderly process for restructuring its debt. Those lawsuits would drain precious resources from the island's treasury-resources that will then be unable either to pay creditors or to meet the basic needs of the Puerto Rican people,” said Senator Blumenthal.
“Congress should take action on a long term plan to deal with Puerto Rico's debt crisis now--no more excuses, no more delays. Republican congressional leadership claims they will work with Democrats to pass a legislative package for Puerto Rico by the end of March, so, in the meantime, Congress needs to pass this bill to give the island critical legal protections,” Senator Warren said. “The Puerto Rican people have been asked to bear huge costs of a long running debt crisis, and now Congress should do its part for the millions of Americans in Puerto Rico who are trying to build a future for themselves and for their kids.”
“I am pleased to cosponsor this bill granting Puerto Rico temporary relief from creditors' lawsuits, giving Congress additional time to act to provide Puerto Rico with access to debt restructuring. I hope that Speaker Ryan will follow through on his promise to take action to protect Puerto Rico from a deepening fiscal crisis that has forced too many families from their homes,” said Senator Reid. “Inaction is not an option. Puerto Rico faces a fiscal emergency that threatens the well-being of more than 3.5 million Americans. These citizens need and deserve the support of their government to get through this difficult period, and it is Congress' responsibility to give them the same tools available to all the states.”
Under the Puerto Rico Emergency Financial Stability Act, the short-term stay on creditor lawsuits would last until March 31. Identical legislation was introduced earlier today in the House of Representatives by Democratic Leader Nancy Pelosi.
A PDF copy of the bill text is available here.