A bill to rescue Puerto Rico from a $73 billion debt crisis finally passed Congress late Wednesday, as senators left for a five-day recess, but only after overcoming a twist of opposition from lawmakers who wanted to protect pensions for coal miners.
The legislation to rescue the island passed the Senate on a 68-30 vote Wednesday night, after already clearing passage in the House. It is expected to be signed immediately by President Obama before the territory goes into a $2 billion debt default.
The Obama administration had gone into overdrive to lobby senators to vote for the bill, dispatching Treasury Secretary Jack Lew to arm-twisting duty on Capitol Hill.
The legislation protects the commonwealth of Puerto Rico from lawsuits while it renegotiates its debt and restructures payments. Senate GOP Leader Mitch McConnell on Wednesday said “failure is not an option,” and pronounced the finished product as “the best and possibly the only action we can take to help Puerto Rico.”
But the bill only passed after overcoming an objection from coal-state senators who were concerned about pension protections for coal miners. Those senators – Republicans Rob Portman of Ohio, Shelley Moore Capito of West Virginia and Democrats Sherrod Brown of Ohio and Joe Manchin of West Virginia – had raised the pension issue with McConnell, of Kentucky.
At issue is the so-called Miner Protection Act, which Senate Democrats unveiled in March in the Finance Committee. That act would protect the pensions of approximately 100,000 retired miners who will see their benefit funds run dry at the end of December.
The bill would prevent cuts by using $3.5 billion in unused federal funds in the Abandoned Mine Land program, a trust built from taxes paid by coal companies to reclaim old and abandoned strip mines. In May, Democrats took the rare tactic of issuing an open letter to McConnell to insist on the legislation, and vowed to attach it to any must-pass legislation that came to the Senate floor.
McConnell himself told AMI Newswire he did not oppose the legislation, but wanted it to clear the Finance Committee first.
“I think we need to deal with that issue and the way to deal with it is through an open and transparent process,” he said at that time.
The larger issue being pushed by Democrats is
saving the Central States Pension Fund (CSPF), a 61-year-old mega-fund which
manages $2.8 billion in annual benefit payments but was hit hard by the 2008
recession. The U.S. Treasury Department in May rejected a “rescue plan”
application it received last September by CSPF administrators, that would have
cut benefits for 270,000 retirees in the U.S. to maintain solvency, with some
retirees seeing cuts of up to 70 percent.
Although the application was rejected, the Central States fund remains financially unstable, and Democrats have said up to $30 billion in aid may eventually be needed.
In the end, because Wednesday night’s vote came just hours before Puerto Rico was scheduled to default, the Senate could not amend the bill as it was passed by the House, which meant the pension protections weren’t included. That prompted Brown, Capito and Portman to vote against the bill. Manchin did not vote, although a spokeswoman told AMI Newswire he would have opposed it.
Still, the bill’s passage was met with bipartisan welcome. House Speaker Paul Ryan issued a statement praising the fact that the bill is not a direct bailout of Puerto Rico, and creates an oversight board of directors to enforce financial reforms.
Senate Democratic Leader Harry Reid of Nevada said the bill protects the country’s public safety, hospitals and schools from being sued.
“The 3.5 million Americans citizens who call Puerto Rico home need this relief and need it now,” Reid said.