President Barack Obama signed the multibillion-dollar economic rescue package for the U.S. territory of Puerto Rico on Thursday, a day after the Senate passed the bill.
Puerto Rican authorities say they are unable to make a $2 billion debt payment due Friday. The measure Obama signed does not relieve the island of its debt, but it will stop any legal action brought on by its creditors.
"The people of Puerto Rico need to know that they're not forgotten, that they're part of the American family," Obama said. "We finally have legislation that at least is going to give Puerto Rico the capacity, the opportunity, to get out from under this lingering uncertainty with respect to their debt, to start stabilizing government services and to start growing again."
The bill also sets up a seven-member board appointed by the president to oversee the territory's debt restructuring plans. But many Puerto Ricans are wary of the panel, saying they fear Washington may put investors' concerns ahead of local priorities.
Neither political party was entirely happy with the bill. Democrats oppose a Republican provision that may lower the minimum wage for some young workers. Republicans say the the bill could amount to a bailout and set a precedent for states with financial problems to seek a similar arrangement.
Puerto Rico is $70 billion in debt and has already defaulted on some of what it owes creditors and bond holders
The Caribbean island is grappling with a 45 percent poverty rate and a Zika outbreak that has damaged its tourism industry, on which its fragile economy depends
The Supreme Court ruled several weeks ago that Puerto Rico could not enact its own legislation to restructure its debt, leaving it to the mercy of Congress.