Vote Explanation for H.R. 5278 — Puerto Rico Oversight, Management, and Economic Stability Act
This week, I voted in support of H.R. 5278, the Puerto Rico Oversight, Management, and Economic Stability Act, which passed the House 297–127. This legislation would provide Puerto Rico with a comprehensive restructuring authority to address its unsustainable debt, coupled with the creation of a seven-member Fiscal Management and Oversight Board to increase transparency and achieve meaningful financial and economic reforms. This board would stay in place until the Puerto Rican government balances its budget for four consecutive years. The bill also creates a Congressional task force to identify and address other impediments to economic growth.
Puerto Rico’s financial problems are the result of decades of economic recession, excessive borrowing by the island’s government, and inaction by Congress to change bankruptcy law that would allow the island territory to restructure its finances. Puerto Rico is now at high risk of default because it is unable to pay off the $70 billion of debt that is in the hands of private creditors. The situation in Puerto Rico is dire. Funding for many of the public services provided to the island’s 3.5 million people has been slashed, and residents are now being asked to shoulder the burden through high taxes and pension cuts. Schools and hospitals, if not already shuttered, face daily electricity or water shortages and there are concerns about the island’s ability to handle a Zika outbreak.
On July 1, Puerto Rico will face nearly $2 billion of bond payments. Should the island’s government default, it may face litigation by its creditors and the further erosion of its economy. While I am concerned with Republican provisions on the minimum wage and overtime pay that jeopardize important protections for workers, this legislation is the result of extensive, bipartisan negotiations involving not only House Republicans and Democrats, but also the Treasury Department and the White House. At the end of the day, this is the only viable option we have to prevent a humanitarian crisis and to ensure the economic success of our fellow citizens in Puerto Rico.