NEW YORK (Reuters) - Democratic senators introduced emergency legislation for Puerto Rico to establish a short-term stay on creditor litigation to allow the debt-ridden island to restructure its debts, according to a press release from Senator Richard Blumenthal's office on Monday.
Puerto Rico, wrestling with $72 billion of debt and a faltering economy, defaulted on part of its debt in August and may default on part of a payment of around $1 billion due Jan. 1.
The U.S. Treasury has urged Congress to act quickly to address the island's debt crisis and Treasury Secretary Jack Lew said last week it is "essential" that Puerto Rico be given access to a mechanism to restructure its debt.
The legislation - the Puerto Rico Emergency Financial Stability Act - introduced by Senators Blumenthal, Elizabeth Warren, Harry Reid and Charles Schumer, is identical to that introduced in the House of Representatives by U.S. House Democratic leader Nancy Pelosi, the statement said.
On Friday, Pelosi sought to rush a bill aiding Puerto Rico onto the House floor but was blocked by Republicans, who control the chamber.
"If Congress waits until a messy and disruptive default has begun, the price of addressing the crisis - in both dollars and human suffering of our fellow Americans in Puerto Rico - will be immense and irreparable," Blumenthal said in the statement.
House Speaker Paul Ryan said last week he had instructed committees to work with Puerto Rico's government to come up with a solution to the island's financial problems and said this should be crafted by the end of March. The House is expected to hold a Jan. 5 hearing on the U.S. territory's financial problems.
