Some Republicans in Congress are spreading the false conceit that legislation allowing Puerto Rico to restructure its debts amounts to a Washington bailout.
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The U.S. House of Representatives” Natural Resources Committee announced on Tuesday that it was canceling a law-writing session, known as a “markup’, that had been scheduled to begin Wednesday and go into Thursday.
Obama administration officials warned at a hearing Wednesday that the island is facing total financial collapse if Congress doesn’t step in. The board could then facilitate court-supervised debt restructuring.
House Republicans hope an emerging compromise can satisfy Puerto Rico’s government, creditors and the GOP rank and file about how the USA territory can deal with its $70 billion debt and emerge from its financial crisis.
Democrats anxious that the control board would be too powerful, prompting echoes of colonialism. Conservative Republicans have resisted this idea, but major defaults are looming.
But it was not enough.
The committee is expected to vote on the bill Thursday.
“To be asked to walk away – to be told to miss a vote – is a request that flies in the face of every member’s conscience”.
But, she added, Democrats are working with Republicans on the legislation.
The House Republican Study Committee, a group of around 170 conservatives, had expressed concerns about the debt restructuring provisions, throwing the bill’s future in doubt. Texas Rep. Bill Flores, head of that group, said members “are encouraged that there appear to be some improvements”.
Such a plan would signal to Wall Street that the Puerto Rico financial crisis is manageable, said Antonio Weiss who is handling the issue for the Treasury Department.
Weiss also said the bill “must more evenly balance competing policy priorities” that are priorities for the administration, such as the extension to the commonwealth of the Earned Income Tax Credit. The new version would increase the size of the control board from five to seven seats, with the two added members picked by the minority party in the House and Senate – a clear enticement to Democrats who have opposed the bill. Pelosi rejected the previous version, saying it would exert “undue and undemocratic control” over the territory.
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Last week, a US District Judge overseeing a class-action lawsuit against Puerto Rico Electric Power Authority (PREPA) and the world’s largest fuel oil suppliers for perpetuating an extensive fuel oil fraud upheld claims that the defendants violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and denied motions to dismiss the suit.
