Re: H.R. 5278 - ‘‘Puerto Rico Oversight, Management, and Economic Stability Act” (PROMESA)
June 9, 2016
U.S. House of Representatives
Washington, DC 20515
I write to you regarding H.R. 5278, the “Puerto Rico Oversight, Management, and Economic Stability Act” (PROMESA). We thank the House Committee on Natural Resources and the House Committee on Rules for their expeditious work in advancing PROMESA to begin to address Puerto Rico’s debt crisis.
Puerto Rico’s escalating challenges are daunting – a $72 billion debt, long-term economic decline, massive outmigration, tax increases compounded by severe public service cuts, and a looming healthcare crisis exacerbated by the Zika virus. Hispanic Federation (HF) and its network of 100 Latino nonprofits see this legislation as an important first step on a very long and arduous road to recovery for Puerto Rico and its 3.5 million U.S. citizens.
We support the all-important debt restructuring authority, which encompasses the entire debt, and the stay on litigation under the bill. However, we are still troubled about the Financial Oversight and Management Board’s composition in not requiring a majority of Commonwealth resident appointments, as well as the legislative, budgetary and administrative overreach that can potentially undermine the democratically-elected Commonwealth government’s authority. In addition, we remain concerned about the security of retiree pensions as this process moves forward.
We acknowledge that PROMESA is the best chance we have to get some federal relief for the people of Puerto Rico, especially regarding the immediate need for debt restructuring powers that will enable the Commonwealth to negotiate for a reduced debt burden and a manageable repayment plan.
Prior to today’s floor vote on H.R. 5278, we encourage Congress to pass the following amendments to create a more-just legislative package that can truly begin to address the island’s grave fiscal problems:
Debt Legality: HF supports efforts to ensure that all portions of the $72 billion debt obligation are legal, by preserving the ability of the Puerto Rico Commission for the Comprehensive Audit of the Public Debt to continue its work in analyzing the legality of certain debts issued by the Commonwealth, and allowing the government of Puerto Rico to act upon any determination by the Commission. [Support Amendment 22 – Serrano, Velazquez]
Worker Protections: Any attempts to lower the minimum wage or enact overtime pay reductions will only serve to further hurt families and the economy. The fact is that the people of Puerto Rico have already suffered enough at the hands of widespread austerity measures. Laws enacted by the island's government have created mass layoffs, service cuts and higher taxes. Gutting wages would only escalate the current mass exodus of young professionals and would be a death knell to the island. These provisions must be removed from the final bill. [Support Amendment 3 - Torres, Gallego, Capps, Grayson, Murphy, Patrick, Polis]
Moving forward, Congress and the White House must tackle additional challenges through subsequent legislation and administrative action in order to truly turn things around for Puerto Rico. These include resolution of federal health care financing disparities that undermine the quality of health care, and the need for progressive federal tax reform, infrastructure investments and a long-term economic growth package.