May 9, 2016 4 min read

SAN JUAN, Puerto Rico – Treasury Secretary Jacob Lew got a first-hand look at the humanitarian impact of Puerto Rico’s $70 billion debt, touring an elementary school dealing with limited electricity, little money for repairs and basic services jeopardized by the financial crisis.

“It can only get worse,” Lew told reporters as he toured Eleanor Roosevelt Elementary School in San Juan with Gov. Alejandro Garcia Padilla.

The Obama administration hopes to jump-start congressional efforts to aid the U.S. territory, and Lew’s one-day trip focused attention on how the 3.5 million residents of the island are struggling with the worsening financial situation.

Puerto Ricans are citizens of the United States.

In a kindergarten classroom, a teacher showed Lew and Garcia evidence of termites in the walls.

The school has problems with electricity, and teachers said they were unable to use laptops and televisions because they cause the power to go out.

In a fourth-grade classroom, the fan was broken on a hot day. A science teacher told Lew she doesn’t have a lab for the children to do experiments.

“You all keep doing your work and we’ll keep doing our work to help you,” Lew told the children.

Garcia said Puerto Rico is not asking for a bailout and has not been offered one.

“If Congress does not act, then we will need a bailout, and it will be very expensive to U.S. taxpayers,” he said.

House Republicans are expected to announce new legislation this week to create a control board to help manage the island’s financial obligations and oversee some debt restructuring.

It would be the third draft of the House bill, which has come under fire from some conservatives who worry it would set a precedent for financially ailing states.

The territory missed a nearly $370 million bond payment May 1.

The default was the largest in a series of missed payments since last year, and Garcia warned there would be more.

Puerto Rico has payments totaling nearly $2 billion due July 1, including about $700 million in general obligation bonds that are supposed to be guaranteed under the island’s constitution.

In an ominous warning to Congress and creditors that include U.S. hedge funds, Garcia said the outlook for the next payment is bleak.

“We don’t anticipate having the money,” he said last week.

Garcia said he had no choice but to suspend the debt payment to avoid cutting essential public services, such as schools and medical care.

Natural Resources Committee Chairman Rob Bishop, R-Utah, has led negotiations in the House.

In addition to disagreement among conservatives, Bishop has also faced objections from Democrats and Puerto Rican officials who say they are concerned the oversight board would be too powerful and the restructuring plan would be too difficult.

Bishop has worked closely on the latest version of the bill with Lew and Treasury officials over the terms of the debt restructuring. He’s said the negotiations with administration officials are one of the things holding the bill up.

The effort has been particularly complicated by disagreement among creditors. While some support the bill, others are fighting it in hopes of preserving larger payouts. Some creditors’ groups lobbying against the legislation have said that it amounts to a financial bailout, even though the bill has no direct financial aid.

Speaker Paul Ryan, R-Wis., has strongly backed the bill. He has said he is opposed to a bailout but that one may become necessary if Congress doesn’t pass the legislation soon and Puerto Rico’s economy collapses.

Following last week’s default, Lew sent a letter to Ryan in which he urged him to quickly resolve outstanding issues on the legislation to help Puerto Rico. He noted that hospitals have laid off workers and the island has struggled to find enough money to effectively combat the Zika virus.

The Senate has yet to weigh in on Puerto Rico while waiting for the House to act.