February 7, 2020 / 5:29 PM / 15 days ago

U.S. House approves $4.7 billion disaster aid, tax breaks for Puerto Rico

WASHINGTON (Reuters) - The U.S. territory of Puerto Rico, reeling from severe earthquakes last month and still struggling to recover from devastating hurricanes in 2017, would get nearly $4.7 billion in new aid under legislation passed on Friday by the House of Representatives.

The Democratic-controlled House, by a vote of 237-161, approved the bill that also contains tax breaks for the bankrupt Caribbean island and its 3.2 million people, who are American citizens.

It is unclear whether the Republican-controlled Senate will consider the measure.

The legislation was crafted after a 6.4 magnitude earthquake rocked Puerto Rico on Jan. 7, followed by another of 5.2 magnitude just days later.

Democrats ignored a White House veto threat issued on Wednesday that cited “waste, fraud and abuse” in previously “misallocated” emergency aid.

“President Trump has turned his back on the island. This Congress must not do the same,” House Appropriations Committee Chairwoman Nita Lowey said during House debate on the bill.

An Appropriations Committee aide said the Trump administration is holding up $1.9 billion in electrical grid aid and $6.5 billion in other federal assistance that previously was enacted into law.

There have been long-running tensions between President Donald Trump and Puerto Rico since two major hurricanes damaged the island in September 2017.

Trump has called Puerto Rico “one of the most corrupt places on earth.” During a brief post-hurricane visit in 2017 he tossed paper towels into a crowd gathered at a disaster-relief distribution center, as hospitals lacked emergency generators, water was scarce and the antiquated power grid was mostly destroyed.

The House-passed measure includes $3.26 billion in federal community development grants, $1.25 billion to repair damaged roads, $100 million to bring schools back to working order, $40 million in nutrition assistance and about $20 million to address energy needs.

It would also expand child tax credits for Puerto Rico and other U.S. territories and increase a low-income housing credit. Other tax provisions aim to spark private investment in low-income communities.

It also expands tax breaks for Puerto Rico’s rum industry, dominated by Bacardi Limited, the largest privately held spirits firm in the world.

The top Republican on the Appropriations Committee said the tax breaks were unnecessary.

As for the $4.7 billion in new aid, Representative Kay Granger said: “Much of that is for disasters that haven’t happened yet.”

Reporting by Richard Cowan; Editing by Andy Sullivan and Dan Grebler

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