Finally after months of public outcry the House of Representative are discussing the financial crisis that is going on in Puerto Rico. The House Republican released a draft of their plan to help Puerto Rico fix this fiscal problem. The plan was issues by the House Natural Resource Committee and it’s expected to be tweaked before it heads for hearings and a possible vote in two weeks. Some of the critics of the Republican plan say that there is much that needs change in the plan.
“It’s universally disliked by bondholders and people in Puerto Rico from all sides of the aisle,” said Federico de Jesus, principal at FDJ Solutions in Washington, D.C. adding that, “it’s a very offensive bill. It does have some restructuring but it’s very protracted.”
The House Republican plan would set up a federal oversight board of five appointed members and allow Puerto Rico to restructure its $70 billion debt. The problem is that the powers given to this board over the governor, legislature, and courts and over the island’s laws and budgets are causing some to chafe.
De Jesus said that authority would “render the elections in Puerto Rico meaningless” because the decisions of officeholders elected by the commonwealth’s residents could be overridden by appointed board members. Adding that, “the oversight board would not be accountable to Congress or the government or Puerto Rican people,” de Jesus said. This board’s members would establish their own budget and set their own salaries without limits, procurement, labor laws of Puerto Rico would not apply and the board would have immunity from any actions taken against it, he said.
There are even more problems with this bill as this proposal would allow for the elimination of the federal minimum wage for workers under 26 years old, eliminates the right to strike and federal overtime rules. The chairman of the House Natural Resources Committee, Republican Rob Bishop, release a statement on Tuesday stating that work continues on the bill and that “perfecting this legislation” will happen with the input from stakeholders.
This is the result of House Speakers Paul Ryan’s call for the assignment of a committee to come up with a rescue plan which was part of the deal worked out with Democrats to keep the government funded through September. Democrats wanted to include language in the bill to help Puerto Rico with its debt by allowing them the authority to file Chapter 9 bankruptcy as proposed by Puerto Rico’s Gov. Alejandro Garcia Padilla.
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