House Poised to Take First Steps to Tackling Puerto Rican Debt Crisis
(Washington, D.C.) – The House of Representatives is expected to vote on legislation to support Puerto Rico in its effort to put its fiscal house in order. The legislation – the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) – installs an oversight board that will assist Puerto Rico in managing their debt payments. Notwithstanding this Congressional action, Puerto Rico is expected to default on nearly $2 billion in debt payments which are due on July 1. Defaulting on this payment may lead to legal action on the part of bond holders that could take years to resolve, cost the island millions, and damage future investors’ confidence in the island’s ability to repay debts.
Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement:
“It’s encouraging that Members of Congress are working together in this bipartisan effort to tackle Puerto Rico’s debt crisis, for the sake of the more than 3 million Americans who call the island home. But this bill is just one step of many that are needed to correct the damage created from years of burdensome government mandates and reckless spending. As this measure moves forward, it is important that legislators work to safeguard the rule of law, protect the interests of both bondholders and taxpayers, and institute responsible spending going forward. This fiscal crisis should be resolved without a taxpayer bailout, and with greater fiscal responsibility from the government in San Juan. The hard-working families of Puerto Rico are suffering because of fiscally irresponsible policies enacted by their government, and due to federal rules and mandates that have helped to bankrupt the island. As we have seen with other countries and with U.S. cities and municipalities, when government consistently spends too much, economic opportunity wanes, jobs disappear, and families suffer.
It’s time for fiscal sanity and prudent spending policies both on the mainland and in Puerto Rico. Congress and Puerto Rico must work together and seriously consider further shrinking the size of government, easing regulatory burdens, and implementing free trade policies that will rejuvenate the island's economy. Without that, private sector growth and a thriving middle class will be impossible.”
For Interviews with a representative from The LIBRE Initiative, please contact Brian Faughnan, 703-678-4581