WASHINGTON — A rare compromise between the White House and House Republicans on how to help Puerto Rico has received cautious acceptance from Connecticut lawmakers and advocates who had rejected previous congressional efforts to help an island mired in a severe financial crisis.
“This is not a perfect bill, and I have reservations about the inclusion of extraneous provisions like delaying overtime protections for Puerto Rico’s workers,” said Rep. John Larson, D-1st District. “At the same time, we cannot allow the perfect to become the enemy of the good. This is a tough but necessary compromise at a time when Puerto Rico truly needs our help.”
The Puerto Rico bill, however, caused a new clash between the Democratic presidential hopefuls.
Former Secretary of State Hillary Clinton said she has “serious concerns” about parts of the plan, but she believes Congress should pass it quickly.
“Otherwise, without any means of addressing this crisis, too many Puerto Ricans will continue to suffer,” she said,
Vermont Sen. Bernie Sanders, meanwhile, came out Friday in strong opposition to the proposal, saying it would give the U.S. government too much authority over Puerto Rico’s affairs.
“We must stop treating Puerto Rico like a colony and start treating the American citizens of Puerto Rico with the respect and dignity that they deserve,” Sanders said.
The compromise bill would allow the island to write down its debt in a process similar to a bankruptcy, while forcing Puerto Rico’s government to submit financial statements and budget blueprints to a federal oversight board.
That oversight board had been a flashpoint in earlier House GOP attempts to draft Puerto Rico legislation.
Under the new bill, the board would have seven members, appointed by the president from recommendations by members of the U.S. House and Senate. The panel would have the authority to enforce balanced budgets and reforms if Puerto Rico’s government fails to do so. At least one of the seven members would be a resident of Puerto Rico.
In previous drafts of the bill, the majority of those on the oversight board would have been Republican nominees, but changing that and other tweaks to the bill opened the door to Democratic backing – and support on the island.
Some Democrats, including Sen. Richard Blumenthal, D-Conn,, are hoping to make further changes to the “Puerto Rico Oversight, Management, and Economic Stability (PROMESA) Act as the legislation makes its way through Congress.
“I am encouraged that this legislation puts us one step closer to providing Puerto Rico with a fair and workable path out of its current situation — an ongoing catastrophe that Congress cannot tolerate in any part of the United States,” Blumenthal said. “I am especially heartened that it walks back some of the poison-pill proposals that have been discussed in the past.”
The bill would not cost the U.S. govenrment any money, but it may face opposition in the House from conservatives Republicans, and its fate in the Senate is unknown.
The PROMESA Act aims to reduce a debt burden that currently eats up about a third of Puerto Rico’s revenues and to avoid courtroom battles among creditors and the island’s government that could hurt future investment in Puerto Rico.
Puerto Rico has defaulted on a $422 million debt payment this month. It faces payments totaling $2 billion on July 1 that island officials say can’t be paid.
Blumenthal sponsored a bill that would allow Puerto Rico to declare federal bankruptcy, a protection current law doesn’t allow.
Puerto Rico is also disadvantaged in that it can’t seek aid from international lenders because it it not an independent country.
Blumenthal said he has made clear “from the beginning of this process that a solution must provide Puerto Rico with a mechanism for debt restructuring.”
“I have also been clear that any solution must respect the Puerto Rican government’s accountability to its people. In the coming days I will be speaking with experts on and off Puerto Rico to ensure that this legislation fits those criteria,” he said.
The National Council of La Raza, the nation’s largest Latino advocacy group, said it is “cautiously encouraged by developments in the House of Representatives to provide relief to Puerto Rico’s financial and humanitarian crisis.”
“Having been in San Juan…and seeing what is needed, and possible, it would have been unconscionable for our elected leaders to continue to stand by while 3.5 million American families and children suffer the consequences of a debt crisis that was not of their own making,” said NCLR President Janet Murguía.
Puerto Rico’s financial crisis has resulted in an outmigration of island residents to the U.S. mainland. Florida has been the most popular destination, but many have also relocated to Connecticut, where more than 7 percent of the population is of Puerto Rican descent, the highest concentration of islanders per capita in the nation.
The Hispanic Federation, an advocacy groups with offices in New York, New Jersey and Connecticut, called the bill “far from perfect.” But the federation said some of the “most egregious” provisions in earlier drafts of the bill had been changed, including the one concerning the oversight board.
The federation said the legislation allows Puerto Rico to restructure its debt and includes a moratorium on litigation by bond holders against the island, which it called “an important reform that will empower the commonwealth during negotiations.”
Still, the federation said it is concerned the bill would have the power to block laws, regulation and contracts approved by Puerto Rico’s legislature. It also said it is “troubled” by provisions that would allow the lowering of the minimum wage for some Puerto Rican workers and overtime pay reductions.
The PROMESA Act gives Puerto Rico’s governor the authority to designate a time period in which employers could pay newly employed workers below the federal minimum wage – currently $7.25 an hour – if those workers are under 25 years old.
“But the fact remains that this version of PROMESA is the best chance we have now to get federal relief for the people of Puerto Rico,” the federation said.
Courtesy of CTMirror