Re: ‘‘Puerto Rico Oversight, Management, and Economic Stability Act” (PROMESA)

June 28, 2016

U.S. Senate
Washington, DC 20515
Re: ‘‘Puerto Rico Oversight, Management, and Economic Stability Act” (PROMESA)

Dear Representative:

I write to you regarding the Senate’s consideration of the “Puerto Rico Oversight, Management, and Economic Stability Act” (PROMESA). 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 nonprofit organizations 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.

While we are pleased Congress is working to address Puerto Rico’s debt crisis, we have major concerns about several components of the bill in its current format. The all-important debt restructuring authority, which encompasses the entire debt, and the stay on litigation are major accomplishments under the bill. However, there are still significant flaws which must be addressed via amendment before a final floor vote proceeds.

Financial Oversight and Management Board: Any proposed oversight board should be more inclusive of island representation and accessible to Spanish-dominant island residents. Furthermore, the board must be tempered to ensure it does not supplant the legislative, budgetary and administrative authority of the democratically-elected Commonwealth government. We call for an amendment requiring the majority of the appointees to be expert residents of Puerto Rico. We further call for an amendment to ensure all board proceedings are conducted in English and Spanish, along with all important written documents.

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. We urge the bill be amended to remove Sections 403 and 404 from the final bill.

Pension Protections: More must be done to protect and prioritize the pensions of retirees to avoid harming struggling working families and the fragile economy. We support efforts to fully fund pensions of retirees.

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. We encourage Congress to carry out the aforementioned amendments to create a legislative package that can truly begin to address the island’s grave fiscal problems, while respecting Puerto Rico's autonomy and supporting working families. 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.

We look forward to working with you to address these urgent needs.

Sincerely,
José Calderón
President