Disguising Chapter 9 bankruptcy legislation as a path forward, Senators Schumer and Blumenthal join President Obama and Nancy Pelosi in advocating a Chapter 9 bailout of Puerto Rico
ALEXANDRIA, VA – The Center for Individual Freedom (“CFIF”) today issued the following the statement in response to the announcement by Senators Charles Schumer (D-NY) and Richard Blumenthal(D-CT) that they will introduce special legislation granting Puerto Rico a Chapter 9 bailout:
“Senators Schumer and Blumenthal have chosen to promote special Chapter 9 bankruptcy legislation for Puerto Rico rather than tackling decades of fiscal mismanagement, cronyism and corruption on the island. Senate Republicans should not be fooled: Chapter 9 bankruptcy is a misguided federal bailout for Puerto Rico. It provides no incentive for the Island’s leadership – led by the Kirchner of the Caribbean, Governor Alejandro Garcia Padilla – to make sound economic and fiscal policy decisions moving forward. We urge Congressional Republicans to reject the Chapter 9 bailout, and instead support a Congressionally mandated and managed control board over the Island providing Puerto Ricans, and all Americans, with a more sustainable, fiscally sound future.”
Chapter 9 would hurt thousands of hardworking Americans on the mainland and in Puerto Rico who have invested savings in Puerto Rican bonds. And longer-term, it would do nothing to reform a broken Island. Furthermore, a Chapter 9 bailout flies in the face of principles for which Republicans are supposed to stand: limited government, fiscal responsibility and the rule of law.
American taxpayers should not be saddled with yet another bailout and force Americans saving for retirement to take a financial hit. Instead, Congressional Republicans should guide Puerto Rico into doing the right thing: trim spending and taxes, stand up to unions and undertake badly-needed fiscal, governance and economic reforms. The time is right for a Congressional control board.