The plan is “the most responsible solution to the crisis because it gives Puerto Rico a path to real reform while protecting taxpayers”, he said. Democrats, too, had to be persuaded the control board wouldn’t be too powerful and debt restructuring too hard.
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The bill doesn’t provide any direct aid, but allows Puerto Rico to restructure its debts holistically, similar to bankruptcy, with help of a financial control board.
A vote by the U.S. House of Representatives on the bill is now expected in the first week of June, ahead of a looming $1.9 billion debt payment due July 1.
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The bipartisan Puerto Rico Oversight, Management and Economic Stability Act seeks to address Puerto Rico’s financial crisis “while preventing a taxpayer bailout for the territory”.
A revised bill introduced late Wednesday would create a control board to help manage the US territory’s financial obligations and oversee some debt restructuring.
U.S. Treasury Secretary Jack Lew (left) and Puerto Rico’s Gov. Alejandro Garcia Padilla visit the elementary school Eleonor Roosevelt in San Juan, Puerto Rico, on May 9, 2016.
Previously, the Treasury Department had demanded that all such language prioritize pensioners over creditors, a proposal Republicans sternly rejected as non-negotiable. “There is an extremely high level of uncertainty, which makes it impossible to attract new investment”, said José Vá zquez Barquet, who owns 18 Subway restaurants on the island and is now president of the Puerto Rico Chamber of Commerce.
“After long bipartisan negotiations, we believe we have achieved a restructuring process that can work”, said Democratic Leader Nancy Pelosi in an emailed statement. Bishop says the control board is created to ensure all are paid.While supportive, Lews statement said: Congress must stand firm and resist calls from financial interests to undermine this effort every step of the way in committee, on the House floor and in the Senate.Others were less positive.
Pensions emerged as a complicating factor, because in addition to Puerto Rico’s$70 billion debt, the island has an unfunded pension liability of some $40 billion. The board has greater leeway to hold hearings, issue subpoenas and impose criminal penalties when seeking information on financial statements from the government at all levels.
The new version does retain a provision to allow the Puerto Rican government to temporarily lower federal minimum wage requirements for some workers, which Democrats have objected to.
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”.
Lawmakers in the House and the White House have reached a compromise agreement to rescue Puerto Rico from going broke.
“I think it’s awful”, said Jaileen Trinidad, a 23-year-old restaurant hostess.
“This territories-clause bill, which will bring all creditors to the table and establish a strong and independent fiscal oversight board, should appeal to conservatives who were concerned about a “bailout” or ‘contagion, ‘” the COFINA Senior Bondholders Ad Hoc Group said in a statement.
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.
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With almost all other details ironed out, disagreements had remained over how to handle appointments to a seven-member board created to oversee the island’s finances.
