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Competing Reactions to the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA)

On Wednesday, May 25th, the House Natural Resources Committee, under the leadership of Chairman Rob Bishop (D-UT), passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) with 29 votes in favor, 10 votes against, and 1 member voting present.

Since that vote was taken, a number of groups have come forward to recognize that while the bill would not have been their first choice for Puerto Rico, the legislation should progress. Others – from both sides of the political spectrum and from within and outside of Puerto Rico – have simply opposed.

Today, the Hispanic National Bar Association (HNBA) concluded, “we cannot forget that at the center of this crisis are the millions of families in Puerto Rico who are in urgent need of relief. They deserve our best efforts to give them the tools and resources to strengthen and stabilize their own economy. We remain hopeful that the House, the Senate, and the President together can craft and pass a bill that accomplishes just that.”

The HNBA noted in its statement that the organization supports the restructuring provisions in the legislation but would like to see additional changes, notably a reduction in the oversight board’s “seemingly endless powers over Puerto Rico affairs.” The HNBA emphasized that “any such mechanism, if ultimately adopted, must be respectful of the democratically elected officials of Puerto Rico, as well as its government institutions and the people who live and work in Puerto Rico.” The statement further explained that “the Board should include more participation from residents of Puerto Rico, either through appointment of a higher number of residents to the Board, or through a mechanism in which the Governor or the Legislature can recommend residents of Puerto Rico for appointment to the Board.” The HNBA also expressed concern about the provisions of the proposal requiring the Government of Puerto Rico to pay for the cost of the Board.

Many other prominent groups and elected officials have weighed in on the debate:

  • Congressman Raul Labrador (R-Idaho) voted in favor of the bill, calling it a “conservative solution.” He was quoted by El Nuevo Dia as saying that special interest groups fought against it in hopes of triggering a catastrophe in Puerto Rico which would force a taxpayer bailout of the territory. H.R. 5278, he said, will “restore stability and revive the economy of Puerto Rico” without any cost to U.S. taxpayers.
  • Senator Bernie Sanders (D-Vermont) opposes the bill, claiming that the oversight board reinforces a “colony-like” relationship between the U.S. and Puerto Rico. Sanders wants the Fed to buy Puerto Rico’s debt and free the territory from it, something government officials say they cannot legally do.
  • Congressman Charles Rangel (D-New York) countered Sanders by noting that “[a]s with so many other pressing matters, the senator is good at identifying a problem without providing a viable solution,” and that “[w]hat we have on the table is the best chance we have. There is no time for politicking. Too many have suffered already, and more will suffer if we fail to act.”
  • Speaker of the House Paul Ryan’s (R-WI) press office curated a collection of quotes from a variety of leaders affirming that H.R. 5278 is not a bailout, and indeed will protect U.S. taxpayers from a bailout.
  • Congressman Doug Lamborn (R- Colorado) opposes the measure, explaining that “[u]nless the people and government of Puerto Rico change their free-spending ways, true economic revitalization will never take place.”
  • Congressman Luis Gutierrez (D-Illinois) is troubled by the degree of control granted the fiscal oversight board the bill will establish. “The priorities in this legislation simply do not match my priorities when it comes to honoring the people of Puerto Rico and trusting in their ability to rule themselves,” he said in a press conference.
  • Rep. Raúl Grijalva, (D-Arizona) said in a hearing that he shared some of the concerns his fellow legislators shared, but that he was still prepared to support the bill. “I wish this bill included a significant federal investment to stimulate the Commonwealth’s dying economy, but it does not. Calling this bill a bailout is a lie,” Grijalva said. “When measured against a perfect bill, this legislation is inadequate. When measured against the worsening crisis in Puerto Rico, this legislation is necessary.”
  • Jared Bernstein, the former chief economist for Vice President Biden and currently the Senior Fellow at the Center on Budget and Policy Priorities supports the bill, explaining that “[t]here’s no way any bill of this sort would pass this Congress without significant compromise and in a quid pro quo for the debt restructuring, the administration accepted the creation of an outside fiscal oversight board to implement the deal and monitor Puerto Rico’s fiscal and economic policy going forward. Given the extent to which the decades of fiscal mismanagement by the Puerto Rican government got them into this mess, the creation of this board is not de facto objectionable, a view accepted by various progressive supporters of debt restructuring.”
  • Peter Roff of U.S. News and World Report is calling PROMESA “typical Washington tripe.” Roff is calling for the “abolishment” of the minimum wage, collective bargaining, and public employee pensions.
  • Hillary Clinton says that she has “serious concerns” about the bill, including the minimum wage and pension factors as well as the oversight board itself.  She asks Congress to address those concerns as the bill moves forward.
  • The Center for a New Economy opposes the bill reluctantly, saying that it “imposes on Puerto Rico a very high cost in exchange for very uncertain benefits. It forces Puerto Rico to barter away its inherent power to make decisions about its own affairs in exchange for the opportunity of accessing a process which – after sorting more than 45 requirements, steps, and levels – may only allow us the possibility of having a court authorize us (or not) to restructure part of our debt.”
  • Twitter offers opinions ranging from “#PROMESA is a slap in the face to Puerto Rico” to “La #PROMESA de la prosperidad Americana.” It’s fair to say that there is no consensus in social media; some favor PROMESA, some oppose it on right-wing grounds (Puerto Rico doesn’t “deserve” it, for example, or it doesn’t support Wall Street sufficiently), and some oppose it on left-wing grounds (that it doesn’t support Puerto Rico’s workers, for example, or that the fiscal oversight board is undemocratic).

The wide disparity of opinions in Puerto Rico and on the U.S. mainland may be a hallmark of the democratic process, but they may also presage a tough battle in Congress to get the bill passed.

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