May 20, 2016
House leaders yesterday introduced a revised bill to help Puerto Rico deal with its debilitating mountain of debt. While the revised bill had the blessing of House leaders from both parties, experts at The Heritage Foundation were not impressed.
“The bill still contains an unprecedented legal stay, suspending creditors rights to access the courts and allowing President Obama’s allies to govern the island free from legal challenges and oversight,” said Rachel Greszler, a senior policy analyst at Heritage. “While the draft theoretically prioritizes bondholders’ rights to payment, it ultimately leaves it up to the Oversight Board and bankruptcy judge’s interpretation to make sure those rights are honored—and that’s far from a sure thing.”
The bill also creates a Congressional Task Force to recommend ways to spur long-term economic growth on the island—a provision that Heritage Research Fellow Salim Furth called “a cruel bit of irony.”
“Congress has thus far proved itself unwilling to address the mainland’s mounting debt and after months of deliberation were not brave enough to put serious economic reforms into this bill to help Puerto Rico solve theirs. Indeed, Congress has helped weaken the island’s economy by protecting the crony capitalists who profit from the maritime Jones Act and refusing to liberate the island from a job-killing minimum wage. Why would anyone think that lawmakers will act more responsibly when they sit on a ‘task force’ than when they sit in chamber?”
Rachel and Salim’s latest commentary is available here, "Congress Aims to Give Debt-Ridden Puerto Rico a Free Pass as Long as Obama Wants." More of their research on Puerto Rico is available below: