Duffy Introduces Puerto Rico Oversight and Debt Restructuring Plan
Wednesday, May 18, 2016
FOR IMMEDIATE RELEASE
Mark Bednar; 202-738-0744
Cassie Smedile; 816-726-1290
WASHINGTON D.C. – U.S. Representative Sean Duffy (WI-07) and Committee on Natural Resources Chairman Rob Bishop (UT-1) today introduced H.R. 5278, the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).
Puerto Rico has over $118 billion of debt in the form of bonds and unfunded pension liabilities. Because its debt has spiraled out of control, the American territory has cut public utilities, closed schools and hospitals, and skipped large payments on its debt.
PROMESA sets Puerto Rico on a path of fiscal responsibility and economic growth by instituting the following reforms:
- Establishes a strong, independent Oversight Board to oversee the island’s finances and budgets.
- Requires Puerto Rico and its governmental entities to produce audited financial statements.
- Ensures that Puerto Rico adopts four consecutive balanced budgets and regains access to the capital markets at a reasonable interest rate.
- Facilitates good faith efforts to reach consensual agreements between Puerto Rico and its creditors.
- If good faith efforts fail to produce a voluntary restructuring agreement, the board can vote to initiate an orderly, court-supervised restructuring process.
- Authorizes Puerto Rico to pay workers less than the Federal minimum wage.
- Creates within the legislative branch a bipartisan, bicameral task force on economic growth in Puerto Rico.
- Provides for an accelerated processes for the review and permitting of critical infrastructure projects.
Congressman Duffy Made the Following Statement on PROMESA:
“Years of disastrous polices have completely wrecked Puerto Rico’s economy. As a result, the island and its millions of American citizens face a humanitarian crisis. That’s why we must allow for a responsible restructuring for Puerto Rico’s debt, and do it without using Wisconsin taxpayer dollars for a bailout.”
Chairman Bishop Made the Following Statement on PROMESA
“Tonight we introduced legislation to responsibly address the crisis in Puerto Rico. The revised bill incorporates technical refinements and input from all stakeholders. Provisions addressing the appointment of the Oversight Board are still being refined and will be addressed through regular order.”
More Background on the Puerto Rico Debt Crisis:
Puerto Rico, a territory of the United States, faces a fiscal and economic crisis that is the result of decades of fiscal mismanagement. The island’s state-run economy is hopelessly inefficient; the government has amassed over $118 billion in debt in the form of bonds and unfunded pension liabilities and has not produced audited financial statements for two years. Puerto has already defaulted on portions of its debt, including $422 million on May 2, 2016.
On July 1, the Island is likely to default on an additional $2 billion in debt obligations, including $800 million of constitutionally backed debt, which poses serious economic and humanitarian consequences. The Puerto Rican government recently enacted a debt payment moratorium, authorizing the Puerto Rican Governor to unilaterally suspend payments on its debt obligations, including the Island’s general obligation debt – a de-facto default.
Large-scale default poses grave consequences for millions of Americans, including investors in Puerto Rico and the mainland. Without broad government and economic reform, Puerto Rico runs the risk of future calls for a financial bailout.
Watch: Congressman Duffy Recent Interviews About The Puerto Rico Debt Crisis
CNBC: “Power Lunch”
CNN: “The Situation Room”
MSNBC: “MSNBC Live with Jose Diaz-Balart”
To View A Summary of PROMESA, click HERE.
To View The Legislative Text, click HERE.