WASHINGTON, D.C. – Yesterday, Representatives Sean Duffy, Rob Bishop and Jim Sensenbrenner introduced a “revised” version of the “Puerto Rico Oversight, Management, and Economic Stability Act,” or PROMESA. In response, the Center for Individual Freedom (“CFIF”) released the following statement:
“Unsurprisingly, the ‘new’ PROMESA legislation is just more of the same, as it does nothing to address the concerns that have been voiced by conservatives throughout this process.
“The control board still is empowered with broad authority to force a cram-down of Puerto Rico’s general obligation debt, which is backed by the ‘full faith and credit’ of Puerto Rico’s government and prioritized by Puerto Rico’s constitution. The bill lacks any clarity with regard to preventing the control board from retroactively subordinating Puerto Rico’s bondholders to the Commonwealth’s government pensions. Meanwhile, all bondholders are stripped of their rights to legal recourse, leaving them severely and unduly disadvantaged at the negotiating table by removing incentive for Puerto Rico to negotiate in good faith with its creditors to reach voluntary resolutions. All of this while doing very little to help jumpstart much-needed economic growth on the island.
“Make no mistake: This latest version of PROMESA is still very much a bailout of Puerto Rico’s profligate government on the backs of American savers and retirees, including many in Puerto Rico, and high-spending states like Illinois are watching anxiously to see if Congress will follow through with the political precedent that it sets.”