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Delegate Plaskett Weighs In On Puerto Rico Bailout Bill As It Passes Through Congressional Committee

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WASHINGTON — Virgin Islands Rep. Stacey Plaskett (D-VI) commented on the Puerto Rico bailout legislation that is currently before the U.S. Congress.

H.R. 5278 is the Puerto Rico Oversight, management and Economic Stability Act (PROMESA) and has been approved to move forward from the House Committee on Natural Resources.

“Today my colleagues, on the House Committee on Natural Resources voted on passage of H.R. 5278 to address the Puerto Rico debt crisis,” Plaskett said. “While I am disappointed the legislation will be moving forward with the proposed Oversight Board for the Virgin Islands and other U.S. territories, I am pleased that the Chairman Rob Bishop (R-Utah) of the Natural Resources Committee has made a commitment to working on language regarding the other territories.

The bipartisan Puerto Rico debt-rescue bill has been blasted by conservatives as a bailout, and by liberals as too harsh to residents of the island territory — but GOP leaders say they’re about to prove the naysayers wrong in a key test vote Wednesday.

Facing $72 billion in debt, and having already missed one payment,  Puerto Rico has asked Congress to step in and allow it to restructure its finances.

After months of negotiations, the House Committee on Natural Resources has a vote slated for Wednesday on a package that would impose an oversight board to review the territorial government’s decisions to help it escape the crippling debt.

And GOP and Democratic leaders on the panel say they’ve threaded the needle to get the best deal possible.

“This is a compromise with the best opportunity to pass,” said Rep. Raul M. Grijalva of Arizona, the ranking Democrat.

Opposition is growing, however.

 Conservatives have been making the most noise, running a barrage of ads arguing taxpayers will be left on the hook and that seniors who invested in the island territory will be “crushed” by the island’s restructuring.

“Illinois, New Jersey and California owe trillions in debt. When these states can’t afford to pay, you could be stuck with the bill. Puerto Rico is just the first domino to fall,” the latest ad from the Center for Individual Freedom, a Virginia-based conservative group, says.

From the left, Sen. Bernie Sanders, a Vermont independent chasing Democratic presidential front-runner Hillary Clinton, kicked up dust when he urged colleagues to reject the compromise, saying the island territory’s residents would suffer from benefit cuts, while the banks who loaned to the debt-addled island would not take a major hit.

Natural Resources Committee Rob Bishop, Utah Republican, predicted the combined opposition will fall short.

“I feel comfortable with both sides,” Bishop said of votes from either party. “The ads against it were so outrageous. It was pretty obvious that they were wrong.”

Analysts say Puerto Rico’s woes are the result of years of overborrowing and spending and the steady exit of young, working-age residents who could help turn around the island’s fortunes. To keep itself afloat, the island is swiping money from pension funds and shifting funds dedicated to one pool of creditors to satisfy others.

The bill has been stuck in neutral for weeks, after Democrats complained about the power of its fiscal oversight board and Republicans said it rewrote the rules from under creditors, setting a poor precedent. Puerto Rico has defaulted on $370 million in bond payments earlier this month, as GOP leaders renegotiated the bill with Democrats and the Obama administration.

Speaker Paul D. Ryan, the Treasury and House Minority Leader Nancy Pelosi have backed the latest version, even though Democrats bemoaned provisions that could lower the island’s minimum wage or change overtime rules.

Leaders in both parties downplayed the influence of Sanders’ opposition among Democrats, though Rep. Luis V. Gutierrez of Illinois, who is of Puerto Rican descent, said he will reject the bill as “counter to basic values of democracy, fairness and justice.”

Plaskett said that she is “grateful for the support of Governor Kenneth Mapp and other members in articulating the concerns of the Virgin Islands in potential costly ramifications of our inclusion in this measure.”

“I would especially like to thank my colleague, Rep. Tom MacArthur (R-NJ), for offering an amendment, which would have restored the bill to its original intent for a Puerto Rico Oversight Board and essentially uphold the financial autonomy of the Virgin Islands and the other U.S. territories—something that will allow for us to continue in the bond market without changes to investor risk assessment.” she said. “I have spoken with House leadership and they have committed to having substantive discussions on how to alleviate concerns of the Virgin Islands and other territories, as well as supporting future legislation that will offer real economic support and equitable treatment to the territories.”

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John McCarthy

John McCarthy

John McCarthy has been reporting on the U.S. Virgin Islands since 1989. He is originally from Detroit, Michigan.

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Delegate Plaskett Weighs In On Puerto Rico Bailout Bill As It Passes Through Congressional Committee