Politics | Tue Apr 19, 2016 10:59pm EDT

Senator Hatch raps House's Puerto Rico debt bill

WASHINGTON | BY RICHARD COWAN AND SUSAN CORNWELL

A high-ranking Republican senator on Tuesday dismissed as "not satisfactory" draft legislation aimed at addressing Puerto Rico's fiscal crisis before a looming debt default on May 1, deepening intraparty divisions on the complex rescue effort.

Orrin Hatch of Utah, who chairs the powerful Senate Finance Committee, told reporters that draft legislation introduced this month by the House Natural Resources Committee is "not satisfactory and it's not going to work. And we're not going to be able to pass it over here” in the Senate.

House of Representatives Speaker Paul Ryan and fellow Republican leaders already were struggling to advance a bill to help Puerto Rico, a U.S. territory, deal with its crippling $70 billion debt. Their efforts have been complicated by opposition from some conservative lawmakers, even as they have been negotiating with the Obama administration over details.

Some conservative House Republicans, who want to protect creditors’ rights, have balked at an element of the bill that could allow Puerto Rico to cut repayments to creditors without their consent, a so-called cram-down debt restructuring.

Hatch, too, wants to protect creditors, but said the bill must include cram-down authority to ensure that more senior bondholders, like those holding Puerto Rico’s constitutionally backed public debt, are better protected.

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