President Obama and Treasury Secretary Jack Lew have a handful of so-called “conservatives” to thank for advancing their signature Chapter 9 bailout bill for Puerto Rico through the Natural Resources Committee.
The “Puerto Rico Oversight, Management, and Economic Stability Act” is a collection of liberal policies intended to solve the Commonwealth’s self-inflicted debt crisis, which will hurt retirement savers who own Puerto Rico bonds.
Many key provisions in the bill have been championed for months by members of President Obama’s inner circle, including Chapter 9 bankruptcy and an unprecedented legal stay that will take away the rights of bondholders to go to court if Puerto Rico stops paying them.
Democrats on the committee were even able to include language that will allow government pensions to be funded with money that was promised to bondholders when they loaned their savings to Puerto Rico’s government.
You might wonder how such a liberal bill managed to get through the committee and onto the floor. Well, with all but one Democrat voting in favor of the measure, and none voting against, President Obama needed only a handful of their Republican colleagues to cross the aisle, and they got their wish thanks to the work of Speaker Paul Ryan.
It is, of course, not a real surprise that the Obama administration and its congressional allies pushed for a plan that would use bondholder money to rescue Puerto Rico’s public pensions and enable its government to avoid having to answer for generations of failed policies. After all, Puerto Rico is the embodiment of the left’s big government ethos, and it is standard liberal politics to attack bondholders for the benefit of Big Labor. Never mind that, in Puerto Rico’s case, the vast majority of bondholders are regular Americans saving for their retirement.
That some Republicans would support such a one-sided measure littered with big government concessions is a stark reminder of how far we have to go to root out cronyism and put the American people back in charge of our government.
The fact of the matter is that it is always good policy to fight for the rule of law. That is not something that should be dismissed as “principled opposition,” it is fighting for the foundation that forms the bedrock of this country. If Congress passes a bill for Puerto Rico that rips up the contracts entered into by bondholders and takes away the rights granted to them by constitutional law, then it is telling those Americans that the rule of law doesn’t apply to them if it creates an inconvenient hurdle for lawmakers looking to pass legislation.
There is a role for Congress to play in solving Puerto Rico’s debt crisis. But using bondholders’ retirement savings to prop up the Commonwealth’s Government and its pension systems is certainly not the right way forward.
Now that this legislation is set to be voted on by the House of Representatives, Americans should demand that their representatives push for a better bill – one that will promote free market policies in Puerto Rico, but does not revoke the rights of retirement savers to protect their investments in a court or give preferential treatment to government pensions.
For Speaker Ryan, and the rest of the Republican majority, there is still time to craft a truly conservative solution to this mess. They had better take advantage of it, because the American people are watching.