WASHINGTON (Reuters) - The Obama administration urged the U.S. Congress on Thursday to provide Puerto Rico with access to a restructuring regime to help the commonwealth deal with its fiscal challenges, the U.S. Treasury Department said in a statement.
"Without federal legislation, a resolution across Puerto Rico's financial liabilities would likely be difficult, protracted and costly," the statement said.
Treasury Secretary Jack Lew and National Economic Council Director Jeffrey Zients met on Thursday with Puerto Rico Governor Alejandro Garcia Padilla.
Garcia Padilla recently released a fiscal and economic reform plan to help Puerto Rico deal with its $72 billion debt burden.
The plan "is an important step toward finding a sustainable path forward for the people of Puerto Rico," the Treasury statement said.
With Puerto Rico projected to exhaust its liquidity later this year, Congress "must act now" to provide the island with access to restructuring, the statement said.
Bills proposing that Puerto Rican municipalities be allowed to reorganize debts under Chapter 9 of the U.S. Bankruptcy Code have been introduced in the House of Representatives and Senate, but the idea has not gathered enough Republican support to advance further.
Garcia Padilla also met on Thursday with Republican Paul Ryan, head of the House Ways and Means Committee, to talk about a new corporate tax system for U.S. companies on the island, according to a statement from the governor's office.
The governor has proposed granting lower tax rates and allowing companies to be treated as domestic corporations for U.S. tax purposes, the statement said.
(Reporting by Eric Beech; Editing by Bill Trott and Peter Cooney)