A reworked version of the Puerto Rico debt bill introduced Wednesday would basically make seven Obama appointees the de facto authority to sell government assets, consolidate agencies and fire government workers in order to get the country’s fiscal books in order.
The president would choose the board members from a list submitted by the speaker of the House to oversee the island’s finances and enforce balanced budgets.
The bill, known as the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), would also allow members to call hearings, subpoena information and impose criminal penalties if false or misleading information is provided.
The committee made it clear the legislation does not provide a bailout and differs from granting the island Chapter 9 bankruptcy rights since it followed the territorial clause of the Constitution. Instead the oversight board would propose a plan to adjust payments, which would be subject to judicial approval. The chief justice of the United States would select a designate a district court judge to oversee the cases.
“The revised bill incorporates technical refinements and input from all stakeholders. Any future changes will be done in public committee meetings,” Chairman Rob Bishop of Utah said in a statement.
House Speaker Paul Ryan praised the bipartisan effort to find a solution for the territory’s fiscal crisis, calling it a responsible solution that doesn’t put the fiscal burden on the American taxpayer.
Ryan said they got the bill exactly where they wanted it to be and wants to make sure the board is strong during his weekly press conference Thursday.
House Minority Leader Nancy Pelosi also said she approved of the measure, saying she is pleased with several of the changes made in the final text.
“While we would have preferred for the bill not to include extraneous minimum wage and overtime rule provisions that harm working families, these provisions are less harmful than originally proposed,” she said in a statement.
Members of the House Committee on Natural Resources had been working with the Department of Treasury on the technicalities of restructuring after delaying a markup on the initial legislation following concerns from both sides of the political spectrum.
“The legislation would allow the Commonwealth to restructure all of its liabilities, provide no bailouts for any creditors, and enable an orderly resolution to Puerto Rico’s worsening crisis. These critical tools paired with independent fiscal oversight will help put an end to Puerto Rico’s debt crisis, which is already showing signs of becoming a humanitarian crisis,” Treasury Secretary Jack Lew said in a statement.
Lew said he is, however, disappointed the agency’s proposals for a a long-term Medicaid plan for the island didn’t make it into measure.
Puerto Rico currently faces $70 billion in debt burden and recently defaulted on most of a $422 million payment to its creditors.
Votes on the bill are expected to take place the first week of June, ahead of the island’s $2 billion debt payment due in July.
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