US Rep. Bishop Reaffirms Ryan’s Pledge to Act on Puerto Rico
SAN JUAN – Gov. Alejandro García Padilla held a meeting Friday morning with Rep. Rob Bishop (R-Utah) at La Fortaleza, where they discussed the island’s fiscal and economic crisis, including a potential federally appointed fiscal control board.
As the Puerto Rico government continues to lobby Capitol Hill for a broad debt-restructuring regime, expectation over potential action by Congress has swung into a higher gear, particularly following House Speaker Paul Ryan’s (R-Wis.) statements earlier this year, pledging to act on the matter by the end of March.
Following the meeting, Public Affairs Secretary Jesús Manuel Ortiz said Bishop reaffirmed the House speaker’s promise to have draft legislation ready by the end of March. “Once there is a draft, we can discuss what they are proposing,” Ortiz said, while stressing any legislation that includes the establishment of a fiscal control board must respect Puerto Rico’s self-governance and be paired with debt-restructuring tools and increased federal healthcare funding.
According to Ortiz, Bishop believes Congress must respect Puerto Rico’s self-governance when drafting legislation that establishes a control board.
Justice Secretary César Miranda said that although discussed during the meeting, a model is not set in stone yet. During the meeting, Miranda spoke about the locally enacted fiscal oversight board, which has yet to be instituted following its enactment a few months ago.
When asked by Caribbean Business if the administration is waiting for Congress’ move to name the members of this board, he said the issue is inevitably tied to what Congress finally decides to do.
“To activate [the board] here, so it later confronts other determinations made at the congressional level, it is truly not practicle,” he said. Nevertheless, Miranda lauded the locally enacted board as a “perfect model because it allows for the control of the fiscal situation without intervening in the powers that correspond to the executive and legislative [branches]. At the same time, it fosters economic development initiatives.”
Meanwhile, the García Padilla administration is urging immediate action if the commonwealth is to avoid additional defaults and litigation amid a more than $2.5 billion debt-service schedule this summer—for which the governor has already said there is no cash to pay it all.
Following a recent hearing held by the U.S. House Natural Resources Committee, which is chaired by Bishop, the GOP lawmaker had said he expects to introduce legislation soon to tackle Puerto Rico’s fiscal and economic woes.
However, clear consensus on how exactly the Republican-led Congress would deal with the problem has yet to be seen. For instance, some GOP members have suggested the commonwealth must first deliver audited financial statements for fiscal year 2014, which have been overdue for 300-plus days, before moving forward on potential legislation.
Sen. Orrin Hatch (R-Utah) sent a letter to the governor, asking for a laundry list of financial information, including the audited statements, to be delivered by March 1, but La Fortaleza has yet to reply. When asked on Wednesday about the missed deadline, García Padilla said: “I don’t accept ultimatums from anybody — and that includes Hatch,” although he acknowledged he would answer the letter eventually.
What’s more, opposition New Progressive Party (NPP) gubernatorial hopeful Ricardo Rosselló, replied to the Republican senator’s letter, blasting the García Padilla administration’s management of the fiscal crisis, including its failure to produce audited statements and how it intends to restructure its debt.
Administration officials, including the governor, have instead argued that calls for audited statements are just an excuse for Congress’ inaction, pointing at all the financial data and information it has released to date on a crisis that is real, they say. García Padilla remains confident that there will be enough support in Washington, D.C., to approve legislation that is favorable for Puerto Rico, allowing it to restructure its unsustainable debt while returning to sustainable growth.
Yet, many observers believe Congress is leaning more toward implementing strong fiscal oversight and less toward broad debt-restructuring powers. What’s more, Resident Commissioner Pedro Pierluisi recently told Caribbean Business that Congress is looking into a board that would have a role within the commonwealth’s debt-restructuring process, adding that it would oversee and mediate in the negotiation process of Puerto Rico and its creditors.
As for Congress, Pierluisi believes it is highly likely legislation will be filed soon, which at least should be approved within committees before March 31. As for when it would reach the floor for a vote, “that’s another story. I think we are talking here more toward April,” he said.