Pierluisi Statement on Draft House Bill on Puerto Rico
San Juan, Puerto Rico—Resident Commissioner Pedro Pierluisi issued the following statement regarding the draft House bill on Puerto Rico:
“In order to obtain my support, to obtain bipartisan support in both the House and the Senate, and to be signed into law by the President, the Puerto Rico Oversight, Management, and Economic Stability Act—or PROMESA—must do two things. First, it must establish a reasonable process that encourages fair and equitable debt restructuring agreements to be reached between bond-issuing entities in Puerto Rico and their creditors, and then enables those agreements to be enforced in a court of law. Second, it must establish a reasonable oversight board that has the authority to supervise, but not to command and control, the Puerto Rico government. If these two criteria are met, the bill can become law. If they are not met, the bill will not become law. And, if a bill does not become law, Puerto Rico and its creditors will almost certainly go over a cliff—together—this summer.
“I want to underscore Chairman Bishop’s declaration that PROMESA is a rough draft and a work in progress—as evidenced by the fact that the current version contains numerous provisions that are still in brackets. The current version will undergo changes before Chairman Bishop publicly releases it as a “discussion draft” next week. Based on stakeholder feedback, the discussion draft will then undergo further changes before it is formally introduced the week of April 11th. And once introduced, the bill will continue to undergo changes as it moves through the legislative process. My goal is simple: to work with my Republican and Democratic colleagues to create a final product that is a net positive for the people of Puerto Rico. I am confident we can achieve this goal. It is not constructive when certain political leaders in Puerto Rico support debt restructuring authority, but oppose the creation of an oversight board to instill fiscal discipline and improve government efficiency and transparency. This is a completely unrealistic position.
“Late last week, I received a copy of the draft bill for the first time. Since then, I have sent over 50 detailed comments to Chairman Bishop, and continue to send additional comments. I have expressed full or qualified support for certain provisions. This includes the debt restructuring section, Title III of the bill, which requires some modifications, but is a promising start. I also expressed support for Section 411, which Chairman Bishop and I drafted together, that establishes a process for the federal government to convey up to 3,000 acres of uncontaminated land on western Vieques to Puerto Rico at no cost. And I expressed support for Section 408, which states that nothing in PROMESA restricts Puerto Rico’s right to determine its future political status, including by using the $2.5 million that Congress authorized and appropriated in 2014 to empower Puerto Rico to conduct the first federally-sponsored plebiscite in our history.
“In my comments to Chairman Bishop, I also expressed opposition to, or reservations about, other provisions in the draft bill, particularly certain provisions related to the duration and powers of the Oversight Board. With respect to duration, Section 209 of the bill provides that the Board will terminate once Puerto Rico has five consecutive years of balanced budgets. I believe this is too long, and that three years is a more appropriate time frame.
“With respect to the powers of the Board, it should be emphasized that, under the bill, the Governor and the Legislative Assembly would retain their primary role in developing a long-term fiscal plan, crafting annual budgets and making taxing and spending decisions, and the Board’s role would be to review these actions and ensure that they meet certain broad metrics. In general, the Board would assist Puerto Rico’s elected leaders, not displace them.
“That said, the draft bill does include certain provisions, nearly every one of which is taken verbatim from the 1995 law that created an independent board for the District of Columbia, that—in my view—give the Board excessive, unnecessary and anti-democratic powers. I have advised the Chairman of my strong opposition to these provisions, and I believe he is open to taking a good, hard look at them. I am particularly focused on Section 208, which authorizes the Board to make recommendations to the Puerto Rico government about ways to improve fiscal stability and then, if the Puerto Rico government does not adopt those recommendation, authorizes the Board to implement those recommendations over the objections of the Puerto Rico government. While I doubt the Board would ever exercise this power, it should not even have it. I am also focused on Section 110, which authorizes the Board to appoint a Chief Management Officer to oversee Puerto Rico’s government agencies, which seems to cross the line from “macromanagement” to micromanagement. And I am focused on Section 205, which gives the Board a role in the government contracting process that I believe needs to be better calibrated.
“Let me be clear. This bill can and will evolve. It contains great, good, mediocre, and bad provisions. I intend to work constructively over the coming days, with my Republican and Democratic colleagues, especially Chairman Bishop, to get this bill into a position where it can become law. That is what every responsible leader in Puerto Rico should be doing, rather than simply ignoring the good provisions and complaining about the bad provisions.”