PROMESA, the Puerto Rico Oversight, Management, and Economic Stability Act, was signed into law by President Obama late yesterday.
Puerto Rico is still expected to default on its constitutionally-guaranteed debt today, but PROMESA is intended to prevent the “death spiral into chaos” that leaders have been predicting.
President Obama expressed his support of the bill at the signing:
“We’ve got millions of our fellow citizens in Puerto Rico who have been suffering under one of the worst financial crises, fiscal crises in memory. And at the consequence of the inability for them to restructure their debt, you’ve seen hospitals unable to operate, ambulances shutting down, basic services shutting down, and government workers not being paid. It has brought enormous hardship to Puerto Rico.
Through some amazing work by our Treasury Department, our legislative staff, and a bipartisan effort in both the House and the Senate, we finally have legislation that at least is going to give Puerto Rico the capacity, the opportunity to get out from under this lingering uncertainty with respect to their debt, and start stabilizing government services and to start growing again.
It’s not, in and of itself, going to be sufficient to solve all the problems that Puerto Rico faces, but it is an important first step on the path of creating more stability, better services, and greater prosperity over the long term for the people of Puerto Rico.
So I want to thank all four leaders in Congress for the hard work in getting this to my desk. And I want to let the people of Puerto Rico know that although there’s still some tough work that we’re going to have to do to dig Puerto Rico out of the hole that it’s in, this indicates how committed my administration is to making sure that they get the help they need. And it’s not going to stop here — we’ve got to keep on working to figure out how we promote the long-term growth and sustainability that’s so desperately needed down there. But the people of Puerto Rico need to know that they’re not forgotten; that they’re part of the American family, and our Congress’s responsiveness to this issue — even though this is not a perfect bill — at least moves us in the right direction.”
The message that PROMESA is not perfect in the eyes of the president, its detractors, or its supporters, is one that has been widespread. It may be inevitable in the case of a bipartisan bill. But it is also important that the message about the importance of Puerto Rico be heard. Congress’s responsiveness to Puerto Rico is and will continue to be an essential part of the solution.