The significance of yesterday’s Supreme Court decision in Puerto Rico v. Franklin California Tax-Free Trust can be summed up this way:  Puerto Rico is at Congress’s mercy.

The case strikes down Puerto Rico’s enactment of a municipal bankruptcy law, the Puerto Rico Public Corporation Debt Enforcement and Recovery Act, which was intended to bring creditors for the desperately indebted public utilities to a single negotiating table.  Franklin held that Puerto Rico is trapped in a netherworld of Congressional making in which the territory cannot authorize its desperately indebted utilities to seek debt restructuring through federal bankruptcy law (Chapter 9), but nor can Puerto Rico write its own municipal bankruptcy law modeled on Chapter 9.  Unlike the 50 states, it is thus removed from federal bankruptcy law’s benefits (access to restructuring), with federal bankruptcy law’s burdens (a bar against enactment of a municipal debt restructuring process under state law) still intact.  That means no debt restructuring will be available for its utilities (let alone the island’s indebted central government) until a new federal statute is enacted.

The contest between Justice Thomas’s majority opinion (writing for Justices Roberts, Kennedy, Breyer, and Kagan) and Justice Sotomayor’s dissent (with Justice Ginsburg) is a war of statutory interpretation, in which the majority interpreted a muddy statutory provision in a way that is arguably more true to that text in isolation but less true to the overall statutory structure of the bankruptcy code.  The majority frames its opinion as simply confirming a limited judicial role vis a vis federal law—Puerto Rico’s problems should be worked out through federal democratic process and a Congressional statutory fix.

As a practical matter, that turns out to be less simple than it might appear.  The problem with federal democratic process when it comes to Puerto Rico is that the territory has weak leverage and participatory rights in federal politics.  Its residents are U.S. citizens, but they have no federal voting rights unless they migrate to the 50 states.  Island residents elect a representative to Congress, but that delegate is not allowed to vote on legislation.  That’s why the island’s legal independence to write and enforce its own laws, through its own democratic process, is so important.  Congress’s problematic bankruptcy law, or at least the Franklin Court’s interpretation of that law, undercuts the island’s self-governance by refuting Puerto Rico’s authority to draft its own restructuring legislation in the absence of access to Chapter 9.  Franklin, as well as in last week’s SCOTUS opinion Puerto Rico v. Sanchez Valle, ultimately dealt a blow to—not for—democratic process.

If Franklin had come out three weeks ago, being at Congress’s mercy would seem like a hopeless condition.  A restructuring bill proposed in Congress in April was loaded with partisan riders and giveaways, such as a land transfer sought by special interests, that alienated the Democrats necessary to enact the bill over the opposition of the Republican Party’s hard right flank.  But today, the odds of federal legislation to permit an orderly workout of Puerto Rican debt are much improved.  Just last Friday (June 9), the House passed a new version of PROMESA (HR 5278), a bill that provides a restructuring and oversight process for Puerto Rican debt.  The bill passed overwhelmingly, though without some members of the right (who saw the restructuring option as inherently a “bailout”) and some members of the left (who saw the oversight mechanism as an incursion into the territory’s sovereignty).  Prospects are good in the Senate for its own version and a later signature at the President’s desk.

Whether the new bill is what Puerto Rico needs (or at least, whether it is the best bill that federal politics can deliver right now) is a much longer story.  Suffice it to say for the moment that after Franklin, PROMESA is the only game in town to get the island’s creditors to a single negotiating table for an orderly rescheduling of its debts.  And that is overwhelmingly what the island, and its creditors as a whole, need.

For the 3.5 million Americans who live in Puerto Rico, the fight to relieve the debt crisis and keep rudimentary public services intact—clean water, education, electricity—is now, more than ever, in Congress’s hands.

Michelle Wilde Anderson is a Professor of Law and the Robert E. Paradise Faculty Fellow for Excellence in Teaching and Research at Stanford Law School.