These are tough times indeed for the people of Puerto Rico: The US territory has been in a recession for almost a decade, has a $72 billion debt it can't pay—and it has now been informed that its only hope is quick action from Congress. The federal government has come up with a plan to help Puerto Rico restructure its debt, but it will require approval from Congress, where Republicans are unlikely to comply, reports the New York Times. The plan includes restructuring under a new federal bankruptcy system that would only apply to territories, reports the Wall Street Journal. It also includes greater federal oversight of Puerto Rico's finances, which the GOP approves of, and an expansion of Medicaid.
Puerto Rico could run out of cash as soon as next month and the administration says that without congressional help, it faces "a long and difficult recovery that could have harmful consequences" for its 3.5 million people. An administration official tells the Times that the situation "risks turning into a humanitarian crisis as early as this winter." The crisis is being felt beyond the island: USA Today reports that many mutual funds in the US have sizable holdings in Puerto Rico, and the Times notes that the dire situation has caused large numbers of Puerto Ricans to move to the mainland US, largely to Florida, where they'll form a major voting bloc in next year's election. (Read more Puerto Rico stories.)