Treasury officials have offered technical advice to politicians crafting the legislation and Mr Lew said that "there has been progress" after day-long conversations on Friday.
"This is a good-faith effort to try and resolve the differences," he said. "There are pressures on Congress that every time they move in the right direction, pull it back a bit. This is not going to be a solution that anyone thinks is perfect."
The island, which does not have access to bankruptcy protections like US cities and towns, has limped along as it balances a $70 billion debt burden with a severely underfunded pension system and basic services.
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Politicians in Washington have so far failed to coalesce around a single bill, with the Democratic leadership pushing back against a strict oversight board that could usurp local leaders in Puerto Rico. Mr Lew said that Treasury had not yet seen the latest revisions and refused to address if he would support a veto of the bill if it didn't include some level of protection for pensioners.
"Our test is, is it a workable restructuring plan? Does it include enough of the credit to come up with a plan that can work? And are you left with a functioning commonwealth that can sustain basic services on the island? These are not bars that are unusual."
Mr Lew said: "Pensions in some cases have already been reduced. Pensions have already borne some of the burden. In the world without any restructuring, pensions are very exposed. In order for a restructuring plan to be workable, the economy of Puerto Rico has to work. There is going to have to be a balancing of creditors and those who get retirement benefits and other bills the commonwealth has to pay. If the test is [that] creditors get paid 100 per cent before anyone else gets paid anything, there is not going to be a functioning Puerto Rico."