The House Committee on Natural Resources released draft legislation to address Puerto Rico's debt crisis. The "Puerto Rico Oversight, Management, and Economic Stability Act" (PROMESA) creates a board to oversee Puerto Rico's finances and restructure its debt. The bill will not be officially introduced until at least mid-April when Congress returns from recess.
"This bill includes oversight and restructuring provisions," noted Eric LeCompte, who testified to Congress on what should be included in the legislation and is the executive director of the religious development group Jubilee USA. "The next few weeks will be an important time to give feedback on the legislation."
The current draft bill creates a five-member oversight board that has the power to approve Puerto Rico's budgets and impose across-the-board spending cuts if Puerto Rico's legislature can't pass an approved budget. Puerto Rico is required under PROMESA to pass its first balanced budget by 2018. The bill also creates a debt restructuring process in federal court.
"We are concerned that the current draft fails to respect democracy in Puerto Rico," stated LeCompte, a United Nations debt expert who advises Puerto Rico's religious leaders on the crisis. "We also need to be certain that we don't balance budgets on the backs of the poor."
More than half of Puerto Rico's children live in homes that receive government assistance. Puerto Rico cut spending for health, education and took money from pensions to pay its debt. The US territory's only children's hospital, which doesn't have an MRI machine, cut its budget 14% over two years.
"Debt restructuring is critical to ending this crisis," noted LeCompte. "Puerto Rico won't see any economic growth until the debt is brought back to sustainable and payable levels."
Jubilee USA Network is an alliance of more than 75 US organizations and 550 faith communities working with 50 Jubilee global partners. Jubilee USA builds an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org