USA lawmakers introduced revised plans this week to guide Puerto Rico’s whopping $70 billion in outstanding debts to a less cataclysmic conclusion that wouldn’t involve an outright default or a potential humanitarian crisis.
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House Speaker Paul Ryan said the Puerto Rico bill is ‘exactly where we wanted it’.
The plan also won tentative praise from Pedro R. Pierluisi, Puerto Rico’s nonvoting member of Congress, who said the bill was “not perfect” but “it is clear we are moving in the right direction”.
Treasury Secretary Jack Lew also expressed support for the bill, which he said includes restructuring tools for Puerto Rico that are comprehensive and workable.
“The legislation would allow the Commonwealth to restructure all of its liabilities, provide no bailouts for any creditors, and enable an orderly resolution to Puerto Rico’s worsening crisis”, Lew said.
Previously, the Treasury Department had demanded that all such language prioritize pensioners over creditors, a proposal Republicans sternly rejected as non-negotiable. In a breakthrough, House Republicans and Democrats have agreed to a deal to help rescue Puerto Rico.
Puerto Rico now faces $70 billion in debt burden and recently defaulted on most of a $422 million payment to its creditors.
House Natural Resources committee chairman Rob Bishop, R-Utah, who has been leading negotiations for the bill, said he wanted to hold a markup of the bill next week or when the House returns in session the second week of June, Politico reported.
But changes to the structure and powers of the oversight board, new guarantees to preserve the relative priority of the island’s various creditors, and the exclusion of a controversial proposal to transfer parkland to the territorial government won agreement between the Republican authors of the bill, House Democrats and the Obama administration.
The “Promesa” legislation will place the U.S. territory under a powerful oversight board that will be charged with overseeing fiscal and structural reforms aimed at stabilizing its finances. “Additionally, there remain extraneous provisions in the bill, such as those regarding labor standards, which will not help address Puerto Rico’s debt crisis”.
“We will do our part to act expeditiously in providing President Obama with a list of qualified candidates for appointment to the oversight board”, Pelosi said.
Another big concern for some government officials and young adults in Puerto Rico is a provision that would allow the local government to temporarily lower the minimum wage, authorizing businesses to pay $4.25 an hour to first-time employees under age 20. A $2 billion installment, the largest yet, is due July 1.
The Huffington Post reports that just before midnight yesterday (May 18), members released details of new legislation that they say will mitigate the impact of the #PuertoRicoCrisis.
“Congress must stand firm and resist calls from financial interests to undermine this effort every step of the way”, he added. Dan Holler, Heritage Action for America’s spokesman, said the conservative group is “very skeptical” that the bill is now more conservative.
But Congress has been reticent to accept any legislation that would offer a bailout to the island, or to permit a writeoff of Puerto Rico’s debt without any reforms made in parallel.
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Congress and the Obama administration have agreed on legislation that would help rescue Puerto Rico from its $70 billion debt.
