May 12, 2016 / 6:40 PM / a year ago

Puerto Rico either gets legislative fix or humanitarian aid: Congressman

The Government Development Bank (GDB) is seen in San Juan, November 30, 2015. Reuters/Alvin Baez/File Photo

NEW YORK (Reuters) - Puerto Rico's debt crisis, if left unaddressed by the U.S. Congress where legislation has stalled in the House Natural Resources Committee, will result in the need to pay for a humanitarian aid package, Congressman Raul Grijalva said on Thursday.

Grijalva, the ranking Democrat on the HNRC from Arizona, said in a teleconference with reporters that it is an "either/or" situation as Puerto Rico faces $70 billion in debt it cannot pay off and a growing humanitarian crisis because it cannot afford maintaining basic social services.

"Either we begin this process, stabilize, create some carve out opportunities for essential services and/or wait for the crisis to get worse and then have to respond with humanitarian relief," Grijalva said, adding that a new draft of the bill had not been made available as of Thursday morning.

Grijalva visited Puerto Rico this week and met with the island's leadership and toured its main medical facilities. He said austerity alone is not going to stay the situation of degraded conditions for health, nutrition and education.

"People talk about a bailout. Thus far there is no money being talked about extended by the United States government," Grijalva said, adding: "We are talking about a piece of legislation that provides for a method of restructuring and for some accountability attached to that restructuring."

The Republican chairman of the HNRC, Rob Bishop of Utah, said he wants a bipartisan bill to emerge from committee but canceled an expected release of the legislation on Wednesday while lawmakers hashed out language revolving around the status of the island of Vieques, pensions and minimum wage rates.

Puerto Rico defaulted on May 1 for a third time on some of its debt, missing a roughly $400 million payment owed by the Government Development Bank, the island's main fiscal agent. It faces a near $2 billion July 1 debt payment.

The legislation's basic structure still includes the creation of an independent oversight board to lead the restructuring of the U.S. commonwealth's credit and work with the local government to develop an economic reform plan.

On the issue of Vieques, Democrats are concerned the language regarding the transfer of federal land on the island, which is mainly a nature preserve, could leave it vulnerable to commercial development in the name of recreation.

"Our position has been from the beginning that Vieques did not belong in this package of legislation," said Grijalva.

Reporting By Daniel Bases; Editing by Alan Crosby

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