Tell Representative Rob Bishop to Say No to Obama’s “Super Restructuring” Bailout of Puerto Rico
Right now, House Natural Resources Committee Chairman Rob Bishop (R-UT) is considering the creation of an unprecedented restructuring regime to address Puerto Rico’s debt crisis. This restructuring mechanism, proposed by the Obama Administration, goes far beyond the authority that states possess under Chapter 9 of the U.S. Bankruptcy Code by allowing Puerto Rico to stiff bondholders who now enjoy constitutional guarantees of repayment in favor of bailing out government pensions.
Such a blatant and dangerous violation of Puerto Rico’s Constitution is neither a credible nor conservative solution to the Puerto Rican debt crisis.
As multiple governors have noted in letters to Congress, the precedent set by such a “Super Restructuring” regime would have major consequences for states, including Utah. Borrowing costs would skyrocket for state governments, harming their ability to finance critical services and infrastructure projects, and the value of retirement funds that hold Puerto Rico and other guaranteed state bonds would plummet.
Perhaps even more alarming: If enacted by Congress, this plan could pave the way for a series of Puerto Rico-like events to occur across the country. If Congress demonstrates a willingness to rewrite bankruptcy rules to bail them out, high-spending, debt-ridden states will be even less likely to cut spending and balance their budgets.
CFIF’s radio ad urges all Utahns to call Representative Bishop’s office at (801) 625–0107 and tell him to protect taxpayers and bondholders by saying “no” to the Obama Administration’s “Super Restructuring” bailout of Puerto Rico’s bloated, irresponsible government.