WASHINGTON (Reuters) - The White House called on Thursday for "common sense steps" to help Puerto Rico claw out of its fiscal crisis as it welcomed a commitment by the leader of the U.S. House of Representatives to consider legislation to help the debt-strapped commonwealth.
"We certainly are gratified that the speaker has committed to bringing up legislation early in the new year to give Puerto Rico access to an orderly restructuring regime," White House spokesman Josh Earnest told reporters.
House Speaker Paul Ryan said on Wednesday he had instructed committees to work with Puerto Rico's government to come up with a solution to the island's financial woes, calling for a plan to be crafted by the end of March.
U.S. Treasury Secretary Jack Lew on Thursday said Ryan's instruction reflected "the need for Congress to act quickly" on Puerto Rico, adding that any solution should include a mechanism for the island to restructure its debt.
Puerto Rico, wrestling with some $70 billion of debt and a faltering economy, defaulted on part of its debt in August and is trying to restructure its borrowings. The island's governor said on Wednesday the island would default on either its upcoming payment due in January or a subsequent one in May.
Democrats and Republicans in Congress have been divided on whether Puerto Rico should be given access to U.S. bankruptcy laws to help it reorganize its debts.
"Providing restructuring authority to the people of Puerto Rico will require Congress to confront difficult interests" but is "essential to protect the 3.5 million Americans" on the island, Lew said in a statement Thursday night.
Earnest said any legislation should give Congress an oversight role. He also repeated the administration's view that reforms to Puerto Rico's Medicaid system should be put in place to help relieve budgetary pressures and again called on lawmakers to make the island's residents eligible for the Earned-Income Tax Credit for low- and moderate-income individuals.
"We believe that would be a common-sense package that would benefit the people of Puerto Rico and allow that government to dig out of the deep hole that they're facing," he said.