Puerto Rico’s access to capital markets is once again in question now that it has passed the Puerto Rico Corporation Debt Enforcement and Recovery Act, which allows for key public institutions to restructure their debt, and the island has been hit with a wave of downgrades, as have monolines like MBIA Inc. (NYSE:MBI) that are heavily exposed to Puerto Rican debt. Now Puerto Rico resident commissioner Pedro Pierluisi, a non-voting member of the House of Representatives, says that he will approach Congress to see if they are willing to support Puerto Rico, most likely in the form of debt issuance guarantees.

Puerto Rico Muni

“Congress has the power to consider legislation to protect the nation’s economy,” says Pierluisi, reports BTIG analyst Mark Palmer. “I’m going to measure the feeling among the leadership regarding whether Congress should intervene in the handling of the fiscal and economic crises facing Puerto Rico.”

This idea has been floated before, and Palmer has argued that it makes no sense for the US to guarantee debt in Egypt and refuse to do the same in Puerto Rico, but most analysts have dismissed it in the past. Palmer argues that the proposal has a better chance of finding support than most people realize.

Palmer says Puerto Rican populations in NY and FL give the proposal a shot

New York Democratic Senators Chuck Schumer and Kirstin Gillibrand have shown support for Puerto Rico in the past, presumably because of the 5.5% Puerto Rican population in New York State, but a round of bailouts goes far beyond anything they’ve done in the past. Besides, the Senators both won their seats by comfortable margins and neither is up for re-election this year. He also points to the 4.5% Puerto Rican population in battleground state Florida as reason not to rule out financial assistance.

But Pierluisi has himself said that Congress isn’t interested in giving out any more bailouts, and Treasury has said that such a move isn’t being considered. With mid-terms coming up, it doesn’t seem like such a politically charged move would be in many candidates’ interest.

Puerto Rico’s debt guarantees could be modeled on successful FDIC program

The good news is that if Pierluisi is able to get some people to back his idea, there’s a successful program to model it after from the last financial crisis. The Debt Guarantee Program, implemented by the FDIC, guaranteed $345.8 billion in outstanding debt, collected $10.4 billion in fees, and has so far paid out $153 million in losses. Most of the post-crisis bailouts have been paid back, but that hasn’t made them anymore popular and selling the public on yet another doesn’t seem likely.