Puerto Rico Gov. Pedro Pierluisi (D) signed a bill on Tuesday intended to decrease the territory’s debt by half, but critics fear it could result in harsh austerity measures.
The law permits Puerto Rico to decrease its debt by more than $30 billion, issue $10 billion worth of new debt and give roughly $7 billion in cash to individuals with bonds who have not been rewarded in almost five years, according to NBC News.
The Puerto Rican Senate narrowly passed the bill in a 14-13 vote, which was followed by a 34-12 vote in the House, NBC reported.
The fate of the law, however, remains unclear because the island’s federal financial control board is not behind it, the network reported.
“Despite great obstacles, today we have taken a big step forward to end the bankruptcy and leave the fiscal control board,” Pierluisi reportedly said in a statement.
NBC reported that the law seeks to terminate an operation that started in 2015 after Puerto Rico announced it was unable to pay the more than $70 billion of public debt that had accumulated over years of excessive borrowing, mismanagement and corruption.
The government ultimately filed for bankruptcy in May 2017, the largest municipal bankruptcy seen in the U.S.
One of the main sticking points between Pierluisi and the control board regarding the law is a proposal to eliminate some public pensions, according to NBC News. The control board was looking to nix pensions that were larger than $1,500 a month by 8.5 percent — which would impact roughly 40,000 retirees — but the government would not get on board with legislation that proposed public pension cuts.
Some lawmakers also reportedly advocated for no cuts to the University of Puerto Rico, which is the largest public college on the island.
“That is why we do not give up in our struggles to defend the pensions of our retirees, to provide the funds that our University needs and to guarantee that our municipalities can serve their people,” Pierluisi said in a statement after he signed the bill, according to NBC.
The control board reportedly published a statement on Wednesday saying it would review the bill, but the group previously said it would oppose the measure.