Congressional Democrats Reject Fiscal Plan

Democrat leaders on Puerto Rico issues in the U.S. House of Representatives late yesterday rejected the fiscal plan for the Government of Puerto Rico adopted by the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) Financial Oversight and Management Board.

Representatives Nydia Velazquez and Jose Serrano of New York echoed Board Member Ana Matosantos in observing that the plan “would ask the people of Puerto Rico to sacrifice” too much “without having a real certainty that there will be growth.”

They added, however, “In addition, there are no guarantees that these funds do not eventually flow to the bondholders.”

They also channeled a point made by Governor Ricardo Rossello Nevares’ representative on the PROMESA Board, Christian Sobrino that, “This plan only will aggravate even more the rapid migration of the residents of Puerto Rico” to the States.

The lead Democrat on the House committee that handles territory matters, Raul Grijalva (AZ), made similar statements.

Grijalva, Velazquez, and Serrano were critical in obtaining the votes in the House that passed PROMESA in 2016.

A spokesperson for the Chairman of the Natural Resources Committee, Rob Bishop, a principal author of PROMESA, only said that the Utah Republican would “review the fiscal plans” and will determine “the best steps to take.”

Earlier, however, the Committee staff member said that the Board should “sue and really challenge to see how far they can push PROMESA’s powers” if leaders of the elected portion of Puerto Rico’s government refuse to implement the plan measures to which they object.

Gov. Rossello (New Progressive Party/NPP) reiterated that his administration – and the Legislative Assembly – would not comply with those measures. He emphasized his argument that the Board could set the fiscal parameters for elected officials but not dictate details within the parameters or policies for the territory that could only have an indirect effect on the economy and, ultimately, government revenues.

Puerto Rico Senate President Thomas Rivera Schatz (/NPP) spoke for all leaders who have spoken out in saying that, “If the board believes that it has the power to approve laws over and above the elected government . . . we’ll see how they implement the policy.”

Board Chairman Jose Carrion had one answer late last night: “I do not want anyone to be imprisoned,” but “We are going to defend the plan . . . until the ultimate consequences.” The vice-speaker of the Puerto Rico House of Representatives earlier had said that he and other legislators would even refuse to follow a court order regarding measures they oppose that require changes in law.

Board Executive Director Natalie Jaresko had another answer, “We would have to sit down with the economists to determine what to do to return to growth” if elected officials refuse to follow aspects of the plan.

Rossello’s predecessor as governor, Alejandro Garcia Padilla (Popular Democratic Party/PDP), who sought the enactment of PROMESA specifically recognizing the Board’s power to dictate policy, offered to join his successor in resisting Board commands. PDP legislators were even more militant.

Among those expressing concern about the plan’s impact on the judiciary were Puerto Rico Supreme Court Chief Justice Maite Oronoz Rodriguez, a Garcia Padilla appointee, and Associate Justice Luis Estrella Martinez, who was named by an NPP governor.

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