The bipartisan rescue package for Puerto Rico is advancing through Congress, but the territory’s leaders are not sold on the deal, saying it’s too strict and stiffs the island’s residents.
Republicans and Democrats linked arms and pushed the bill through the House Natural Resources Committee on a 29-10 vote Wednesday, saying it’s the best a divided Congress can do to help Puerto Rico restructure its $72 billion of debt without resorting to a taxpayer bailout.
The bill imposes an oversight board to review the territorial government’s decisions and petition for debt restructuring, should voluntary negotiations with bondholders fail. It also permits changes to minimum wage and overtime rules in an attempt to spur the island’s economy.
Puerto Rico Senate President Eduardo Bhatia, who attended the committee’s meeting, said in Spanish on his Twitter account that no one on the committee tried to uproot the oversight board or to make sure government retirees’ pensions were funded.
Puerto Rico Gov. Alejandro Garcia Padilla praised the House panel for working to “address its insolvency, protect essential services and grow its economy,” but he asked Speaker Paul D. Ryan, Wisconsin Republican, to scale back the powers of the board.
“Puerto Ricans are Americans and our democratic rights need to be protected, just like those of American citizens living on the mainland, and the oversight provisions do not meet that obligation,” he said.
Commissioner Pedro Pierluisi, the island’s nonvoting member of Congress, said he backed the bill because its pros outweighed its cons, though he chided members for ignoring Washington’s “second-class” treatment of Puerto Rico compared with the states.
For instance, he said, federal Medicaid payments to insure the island’s poor were capped.
“It may give you comfort to blame everything on Puerto Rico,” he said before the committee vote. “But it is a false comfort, rooted in a flawed reading of history.”
The bill still has a long way to go before becoming law. It must clear the full House and the Senate, and then be signed by President Obama.
Mr. Obama’s aides were involved in drafting this latest version of the legislation.
“I commend the members of the Natural Resources Committee — on both sides of the aisle — who worked to responsibly address Puerto Rico’s fiscal crisis and prevent a bailout,” Mr. Ryan said after the vote.
Supporters acknowledged that Puerto Ricans were wary of the legislation.
“I don’t think there will be parades in the street cheering us on,” the committee’s top Democrat, said Rep. Raul M. Grijalva of Arizona. “In some respects, the Puerto Rican people found parts of those bills very offensive, and I agree with them.”
He said Puerto Ricans may view the compromise bill favorably down the road, but for now, many are fuming that a seven-member oversight board will monitor their elected leaders’ decisions.
Sen. Bernard Sanders of Vermont, who is chasing Hillary Clinton for the Democratic presidential nomination, urged his colleagues to oppose the rescue bill. He said the island’s residents would suffer more than the banks that loaned to the debt-addled nation.
On the right, conservative groups backed by hedge funds have run a bevy of ads against the bill, arguing that taxpayers will eventually be left on the hook.
Rep. Tom McClintock, California Republican, offered an amendment to try to prioritize general obligation bonds in any eventual restructuring. But the committee rejected his proposal on a 27-12 vote.
Committee Chairman Rob Bishop, Utah Republican, and others said the committee shouldn’t dictate who should be paid first.
Rep. John Fleming, Louisiana Republican, tried but failed to eliminate a stay on creditor lawsuits that will be in place until Feb. 15 or six months after the law is enacted, whichever comes later.
The panel did, however, require the Government Accountability Office to study how Puerto Rico got into heavy debt so it doesn’t happen again.
It also said the oversight board should investigate whether Puerto Rico underrepresented the risk tied to its bonds when it sold them to investors.
Copyright © 2021 The Washington Times, LLC.