Democrats introduced two bills on March 14 in hopes of offering Puerto Rico more opportunities to get rid of some of its $72 billion debt.

The two bills, released by Robert Menendez, D-N.J., would give Puerto Rican pensions preference over bondholders. Puerto Rico’s retirement system currently has around $46 billion in liabilities and about $2 billion in assets.

The proposed measures designed to alleviate Puerto Rico’s crisis will very likely be rejected by House Republicans, who will be releasing their own legislative proposal regarding Puerto Rico’s economic crisis later this month.

The Time Is Now

In 2015 Puerto Rico Gov. Alejandro García Padilla made a public plea to the island’s creditors to defer debt payments, if possible, for up to five years.

“The debt is not payable,” said García Padilla,“There is no other option. I would love to have an easier option. This is not politics, this is math.”

Sen. Menendez has re-emphasized the economic urgency of the situation in the U.S. territory.

“Congress has to act immediately to fix the federal funding shortfalls and give Puerto Rico the tools it needs to fully restructure its debt," said Menedez “That’s why I’m introducing a comprehensive legislative package that provides critical health-care funding, individual tax incentives to encourage work in the formal economy, and a mechanism for territory-wide restructuring of the island’s debts."

Republicans Have a Different View

In order to help fix Puerto Rico's debt crisis, Republicans have demanded the creation of a financial control board, which would have much stronger authority than oversight proposed by the Democrats. Conservative lawmakers would like this independent financial review board to have the power to arbitrate creditor disputes and to set the future agenda for Puerto Rico's pension system.

Under the Republican proposal, White House and congressional leaders would be able to appoint a board of financial experts to arbitrate whether bonds issued by utilities or by the Puerto Rican government could actually be written.

Parish Braden, spokesman for the Natural Resources Committee -- the committee that is currently writing this legislation -- sees this solution as more balanced and prudent than that suggested by Democratic legislators.

"We expect to have a framework that protects taxpayers and restores solvency to the island," said Braden.

Territory Needs Lawmakers to Come Together

Puerto Rican congressman Pedro Pierluisi hopes that the bills proposed on Monday will pass so that the economically hampered island can begin to get out from under its massive debt.

"As I have stated repeatedly, we are either going to have a successful bill that embodies a principled compromise between Republicans and Democrats, or an unsuccessful bill that goes nowhere -- which is the worst possible outcome for both Puerto Rico and its creditors," said Pierluisi.

Related