PROMESA advances to House floor; CNE won’t endorse

Written by  //  May 26, 2016  //  Government  //  No comments

Pierluisi Bishop Grijalva

From left: U.S. House Natural Resources Committee Chair Rob Bishop, Pedro Pierluisi and Raúl Grijalva convene during Wednesday’s hearing.

The PROMESA Act (H.R. 5278), the bill aimed to address Puerto Rico’s debt crisis, passed in the U.S. House Natural Resources Committee Wednesday with bipartisan support from lawmakers.

The final vote tally was 29 in favor and 10 opposed. Of the 24 Republicans on the Committee that voted, 14 — or nearly 60 percent — voted “yes.” Of the 16 Democrats on the Committee that voted, 15 voted “yes” and one voted “present.”

“PROMESA was approved by the Committee with strong bipartisan support, a remarkable fact in light of the highly partisan nature of the current Congress. We defeated every amendment designed to damage the bill or to disturb its carefully-calibrated contents,” said Resident Commissioner Pedro Pierluisi following the lengthy markup hearing.

The measure was approved with amendments that Pierluisi said will “strengthen the bill or are technical in nature.”

Some of the amendments that were rejected were introduced by Rep. John Fleming (R-LA) and Rep. Tom McClintock (R-CA) who sought to give creditors better standing, such as removing the automatic stay of litigation and exempting Puerto Rico’s $18 billion in General Obligation bonds from restructuring.

“As a result, we preserved this balanced legislative product that congressional leaders from both parties, along with the experts at the Treasury Department, have together worked so hard to craft,” Pierluisi said. “I’m really pleased — and proud —that a critical mass of Republicans and Democrats who care about Puerto Rico’s future united in this fashion.”

Meanwhile, Committee Ranking Member Raúl M. Grijalva (D-Ariz.) voted in favor of the bill, but said in his opening statement that this is not the bill he would have drafted.

“The Puerto Rico bill is flawed, but after months of working with Republicans and the Administration, I realized that compromise was necessary to pass the bill through Committee with bipartisan support,” Grijalva said. “There is still room for improvement and I will continue to fight for the people of Puerto Rico to make sure this bill will ultimately put families on a clear path to recovery and prosperity.”

The PROMESA Act is expected to hit the House Floor for a vote in early June, after which it is expected to move to the Senate.

CNE withholds endorsement of PROMESA bill
As the hearings on the bill were going on in Congress, members of the Center for a New Economy in Puerto Rico — which invested a significant amount of time sharing its expertise on the complexities of the island’s fiscal and economic situation with members of Congress — said they could not endorse the bill as it stands.

““First of all, this project imposes on Puerto Rico a very high cost in exchange for very uncertain benefits. It forces Puerto Rico to barter away its inherent power to make decisions about its own affairs in exchange for the opportunity of accessing a process which — after sorting more than 45 requirements, steps, and levels — may only allow us the possibility of having a court authorize us (or not) to restructure part of our debt,” said CNE President Miguel Soto-Class.

“Second, while it is true that Puerto Rico needs strong fiscal controls, those controls need to be imposed by the island’s government institutions. We gain nothing from the imposition of an excessively powerful foreign control board that will balance the checkbook but that, once its mandate is finished, will leave intact the same weak and decayed fiscal and governmental institutions that have brought us into the present quagmire. Puerto Rico needs durable and long-term transformations,” he said, adding not endorsing the bill was a “very difficult decision.”

“Those who argue that our elected officials have been incapable of achieving the transformations that Puerto Rico needs are right. But the answer to this problem is not a control board designed by other politicians from outside Puerto Rico,” he said.

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