SAN JUAN, Nov 12 (Reuters) - Senator Chuck Grassley, who chairs the Senate Judiciary Committee, said on Thursday he will convene a hearing on Puerto Rico’s financial turmoil on Dec. 1.
Grassley, an Iowa Republican, said in a statement that he wants to help the committee and the public “gain a better understanding of the root cause of Puerto Rico’s fiscal problems, discuss what’s currently being done, and consider what options are available.”
Puerto Rico, a U.S. commonwealth facing $70 billion in debt and a roughly 45 percent poverty rate, is barred from filing for bankruptcy under federal insolvency laws. Legislative proposals to give the island access to a debt restructuring process have been supported in one form or another by the island’s government, some presidential candidates, and the Obama administration.
Lawmakers, however, have signaled that it might take Congress a long time to enact a legislative solution for Puerto Rico, and have urged the U.S. Treasury to do more to help the island.
The Dec. 1 hearing coincides with a roughly $355 million debt payment owed by Puerto Rico to some of its bondholders. Moody’s on Wednesday said it is likely Puerto Rico will default on the debt, and Puerto Rico’s governor, Alejandro Garcia Padilla, has said the island would default if forced to choose between paying debt and continuing vital services.
Garcia Padilla has asked creditors to restructure their debt consensually, but has faced resistance from bondholders who demand more fiscal reform within the island’s government.
Republican lawmakers have taken similar positions. The Senate Judiciary Committee oversees bankruptcy policy, but Grassley said in Thursday’s statement that bankruptcy legislation for Puerto Rico should be accompanied by fiscal reform on the island.
“Throwing taxpayer money at the island without” such reform, he said, would fail to “resolve the underlying problems in Puerto Rico.”
Witnesses for the hearing will be announced at a later date, the statement said. (Reporting by Nick Brown; Editing by Meredith Mazzilli)