What Puerto Rico Needs From Congress by May 1 Debt Deadline

Puerto Rico is facing its biggest debt deadline yet on May 1, but Congress, which experts say is the territory's only hope, likely won't be doing anything about it.

"Congress holds keys to solving the situation," economist Aleksandar Tomic told ABC News about the territory's $73 billion debt crisis.

On May 1, a $422 million payment is due to Puerto Rico's Government Development Bank, its biggest yet. Its upcoming deadline of $2 billion looms even more ominously. There is one immediate way that Congress could help, Tomic said, which is re-instating Chapter 9 bankruptcy protection afforded to mainland municipalities. That provision was stripped of Puerto Rico by Congress in 1984 and there is no real reason Congress could not re-instate it, according to Tomic.

"This would allow Puerto Rico to try and engage debt holders in restructuring efforts that might help avoid the dire economic consequences of full bankruptcy," said Tomic, Boston College's Woods College of Advancing Studies program director of Master of Science in Applied Economics.

In June, the territory's governor declared that it could not pay its debts. Since then, there's been little done to help the territory's debt crisis, thought 3.5 million American citizens reside there. The unemployment rate in Puerto Rico is 11.8 percent, while its population has shrunk by more than 5 percent in the last decade. Meanwhile, the cost of living has skyrocketed as per capita income is as low $19,000 per year.

The Puerto Rican debt is small enough that any default will not, in and of itself, create a significant economic event on the mainland, nor in the world financial system, Tomic said.

"However, it will be catastrophic for Puerto Rico, as island government might not be able to provide even the basic services," Tomic said. "The exodus of businesses and populations will continue, and the territory will fall deeper into a downward spiral of missing debt payments, shrinking economy, and exodus of an able-bodied and employable population."

On Tuesday, Republican House Majority Leader Kevin McCarthy said Congress won't be acting to push legislation to help Puerto Rico in time for the May 1 deadline.

"Congress can, of course, bail out Puerto Rico, and for all the political grandstanding currently taking place, this option might become viable if the plight of Puerto Rico's population gains enough media attention," Tomic said.

Beside Congress' inaction, Puerto Rico also faces legal battles between the bondholders and the territory's government, "but these are par for the course in any bankruptcy situation," Tomic said.

McCarthy has said he isn't in favor of a bailout.

"We're going to protect taxpayers, it will not be a bailout," the California congressman said, according to the Associated Press. "And if we don't proactively do that we could be in a situation that puts taxpayers at risk."

A draft bill has been stuck with the House Natural Resources Committee, which would have put into place a restructuring of Puerto Rico's $70 billion debt had the scheduled committee action taken place on April 14.

"All in all, the economic situation in Puerto Rico is dire, and it is simply a question how much worse will it have to get before Congress steps in, most likely with a bailout," Tomic said.