La Fortaleza Awaits for Congress Action, Which May Fall Short
SAN JUAN — Uncertainty over Capitol Hill action on the Puerto Rico fiscal crisis continues to loom large as the Alejandro García Padilla administration scrambles to secure enough support among Republicans in Congress to achieve broad debt-restructuring tools.
“We know that a majority of the Republican delegation hasn’t been willing to address the Puerto Rico situation, except for House Speaker Paul Ryan [R-Wis.], who has pledged to have draft legislation ready before March 31 to begin the discussion,” Public Affairs Secretary Jesús Manuel Ortiz told reporters on Friday.
Expectations have ran high on Ryan’s self-imposed deadline, with a few GOP members, including Natural Resources Committee Chairman Rob Bishop (R-Utah) and Rep. Jim Sensenbrenner (R-Wis.), both of whom recently visited the island, reaffirming the House speaker’s call for action. On his way out of La Fortaleza earlier this week, Sensenbrenner said Congress’ final say is “a work in progress,” aimed at delivering legislation that could secure overwhelming majority in the lower chamber before heading to the Senate.
The House Natural Resources and Judiciary committees are already working on draft legislation, yet it is still unclear what exactly Congress would do at the end of the day.
The Natural Resources committee posted Thursday in its official Twitter account a graphic titled “Puerto Rico: the path forward.” The latter would include strong, independent oversight authority and audited financial statements, followed by voluntary debt restructuring, government reform & fiscal responsibility, market confidence in Puerto Rico, and ultimately, long-term economic stability & prosperity.
“Barely afloat with $70 billion in debt, the path towards long-term economic stability in #PuertoRico is clear,” the tweet reads.
When asked by Caribbean Business whether Bishop and Sensenbrenner have specifically supported debt-restructuring tools during recent talks with government officials, Ortiz said: “They are aware and they have all the numbers, documents and reports that establish the Puerto Rico situation…. Everybody here knows what is needed. We are confident the dialogue will be positive at the end of the day.”
There has been speculation that Republicans will lean toward establishing strong fiscal oversight without broad debt-restructuring tools, something that La Fortaleza won’t support. Moreover, the García Padilla administration continues to stress that any type of fiscal oversight appointed by Congress must respect the island’s self-governance.
“They know that the board itself doesn’t address the situation,” Ortiz said, while stressing that “an incomplete measure wouldn’t be worth it.” He added that the fiscal control board issue “is not the main topic” during discussions between the administration and the GOP-controlled Congress, but rather the debt-restructuring mechanism.
Resident Commissioner Pedro Pierluisi recently told Caribbean Business that Congress was looking into a federal fiscal-control board that could also have a role in the commonwealth’s debt restructuring, adding that it would oversee and mediate in the process.
The clock continues to tick on the government as it quickly approaches a $2.5 billion debt-service wall beginning May 2, with $422 million owed by the cash-strapped Government Development Bank, followed by more than $1.5 billion due on July 1 that includes roughly $780 million in GOs. The administration has already there is simply not enough cash to meet in full these payments, and voluntary debt-restructuring talks with creditors are moving at snail’s pace, particularly given the uncertainty on Capitol Hill over the commonwealth matter.
“Let’s wait to see what they propose. If at the end of the day it doesn’t solve the problem, we would say it loud and clear,” Ortiz said.