Freedom Line Blog

CFIF opposes the dangerous proposed “Super Chapter 9” bankruptcy legislation for Puerto Rico (under the title “Puerto Rico Oversight, Management, and Economic Stability Act” or “PROMESA”), which was recently released by the Committee on Natural Resources in the House of Representatives.

Believe it or not, that proposed bill constitutes an even more dangerous version of the Obama Administration’s unprecedented bailout proposal, leaving American savers and retirees to pay the price for the fiscal irresponsibility of politicians in Puerto Rico.  It also would create a dangerous precedent encouraging high-spending states like Illinois to seek the same bailout from Congress, it would raise borrowing costs for states, it would undermine the value of retirement funds across America and it would remove any incentive for fiscally irresponsible states to enact meaningful reform.

Unfortunately, some in Congress claim to oppose a bailout for Puerto Rico without recognizing and acknowledging that the proposed legislation means exactly that.  Representative Rob Bishop (R – Utah) offers a leading example, saying that, “there will be no bankruptcy, there will be no bailout.”

Fortunately, Mainstreet Bondholders, a project of the 60 Plus Association, provides a useful corrective appropriately entitled “Read the Bishop Bill – This Is Super Chapter 9”.  It itemizes in easily-understood bullet-point terms how, “Insisting that this bill is not Chapter 9, and simply renaming it something else, does not change the substance of the legislation.  Make no mistake – this is exactly what the Obama Administration asked for when it lobbied for Super Chapter 9!”  It is worth the quick read.

Those who support the proposed legislation, including Rep. Bishop, may have their hearts in the right place.  But that doesn’t change the fact that the bill would bring precisely the sort of bailout on the backs of Americans they purport to oppose.

We at CFIF therefore ask all Americans to contact their elected representatives in Congress to express their unequivocal opposition to the House’s “Super Chapter 9” bailout plan for Puerto Rico and its spendthrift politicians.