What will be the next bail out? If you guessed disability, social security or related services, you are wrong.

President Obama is looking to throw nearly bankrupt Puerto Rico a financial lifeline, but the Republican-controlled Congress may be in no mood to offer anyone a bailout.

Obama administration officials proposed a plan to assist the Commonwealth of Puerto Rico that is not a direct federal bailout, but that should be enough to give the beleaguered  island nation some breathing room.

The new plan calls for the creation of a new territorial bankruptcy regime for the commonwealth and new fiscal oversight on Puerto Rico and its $72 billion debt. The President’s ambitious plan offer a way forward in a very sticky situation. However, it also needs a Republican-led Congress commited to budgetary restraint to sign onto the deal.

The administration’s plan was provided to both The New York Times and Agencia EFE, a news organization in Puerto Rico, by White House officials on Wednesday evening.

Just hours before, Puerto Rico’s Government Development Bank announced negotiations with a few holdout creditors to convince them to voluntarily accept lower bond payments had failed. Of note, the GDB faces a bond payment of around $300 million on December 1st and has already announced it doesn’t have the cash to pay.

Puerto Rico no tax

Joint statement from Obama administration officials

“Administrative actions cannot solve the crisis,” Jacob J. Lew, the Treasury secretary, commented in a joint statement released late Wednesday with Jeffrey D. Zients, the National Economic Council director, and Sylvia Mathews Burwell, the health and human services secretary.

“Only Congress has the authority to provide Puerto Rico with the necessary tools to address its near-term challenges and promote long-term growth,” the statement noted.

Puerto Rico superbond idea floated

ValueWalk reported earlier this week that government officials from the U.S. and Puerto Rico were discussing a “superbond” to be administered by the U.S. Treasury as a key step in the restructuring of the island’s $72 billion debt.

Wall Street Journal sources claim the superbond would be structured so the U.S. Treasury or a designated third party would administer an account holding some of the island’s tax collections. Funds in the account would be used pay holders of the superbond. Presumably, existing Puerto Rico bondholders will be given pro-rated shares of the superbond at a specific, still under negotiation rate.