Posted on 03/14/2016 12:13:04 PM PDT by jazusamo
Senate Democrats have unveiled legislation to alleviate Puerto Rico’s debt woes, urging that the island be allowed to declare bankruptcy on all of its debt.
The bill, released Monday, would allow the U.S. territory to restructure its $72 billion in outstanding debt and create a fiscal oversight board for the island.
“For the 3.5 million American citizens living on the island of Puerto Rico, time is running short,” said Sen. Bob Menendez
(D-N.J.), one of the bill’s sponsors. “Congress has to act immediately to fix the federal funding shortfalls and give Puerto Rico the tools it needs to fully restructure its debt.”
The other Democratic sponsors of the bill are Sens. Sherrod Brown (Ohio), the top Democrat on the Banking Committee; Maria Cantwell (Wash.), the ranking member of the Energy and Natural Resources Committee; and Sen. Richard Blumenthal (Conn.).
The measure is likely to be opposed by Republicans, who have been reluctant to let Puerto Rico declare bankruptcy on large amounts of its debt. Investment firms with significant holdings in Puerto Rican debt are also likely to make their displeasure known.
At the same time, House Republicans are trying to craft their own bill to address the debt crisis before a March 31 deadline set by Speaker Paul Ryan (R-Wis.).
Time is of the essence for Congress; Puerto Rico is expected to default on some of its legally owed payments as early as May.
The Obama administration has floated the idea of letting Puerto Rico restructure some of its debt, but has stopped pushing to allow the island access to Chapter 9 of the bankruptcy code, which provides debt restructuring powers to the states.
The Senate Democratic proposal goes much further by giving the island the power to declare bankruptcy on all its debt.
The bill would also establish a fiscal oversight board, filled with nominees selected by a mix of Puerto Rican officials and the president. It would also require Puerto Rico’s governor to establish a five-year fiscal plan to get the island’s finances in order. The measure would grant relief to Puerto Rican residents in terms of additional tax relief and healthcare coverage, comparable to what the states currently receive.
Why not? It appears lot of people have no qualms with bankruptcy.
The Uniparty is going to do it anyway... they want to see which side can claim the credit first.
Of course, can’t have the bankers (masters) upset.
The government of Puerto Rico has been running a Ponzi Scheme for years.
No more money for these con men!
Here’s an idea. Cut your expenditures until they match what you take in for taxes.
Part of the cost of making such a bankruptcy declaration will be receivership managed by a third party to renegotiate all the public employee sweetheart pensions as well as loss of statehood and the right to vote in federal elections.
I, for one, would love to see the fiscally responsible counties in California to be able to band together and apply for readmission to the union as new conservative states.
Bankruptcy means that bondholders should take the losses.
Unless of course they support the Clinton Foundation, in which case there can no doubt be found some money to make them whole.
Why do any new laws need to be passed? If the bond-holders feel the terms of the bonds require things to happen in PR that are not happening (like selling assetts, or requiring higher taxes on residents) let them sue to enforce those terms.
Think about it. Default on the bonds with no way to resolve the rest of the problems and all they have done is shut off access to any new borrowing, not addressing root causes.
Really? Sounds a lot better if that's true.
The Dems will negotiate...
“Either make it a state (2 guaranteed Dem senators and reps in perpetuity) or let them go bk”
That’s not the way it is now, but the way it ought to be to forestall such a possibility as listed in post #12.
I agree about Dems making it a state, they want it so bad they can taste it.
Because you're an alarmist? No, because you're a realist.
This is a twofer for the Dems. It's a nose of the camel under the tent for socializing state and local debt, and it should play well with Puerto Rican Hispanics, wherever they may be. The first is more important--after all, if we can help out Puerto Rico, why can't we help out those poor firemen, police, and teachers whose exorbitant pensions promises cannot be met by the underfunded Illinois pension plans?
According to Sen Menendez, PR got into this mess because they weren’t being given enough of our money.
“Congress has to act immediately to fix the federal funding shortfalls”
Yes, I see what you mean.
So, lets assume that they are not allowed to declare bankruptcy. First they default on the Bonds, then they have to start defaulting on everything else, which is even harder to pay without access to borrowing, it's strictly a cash-in, cash-out basis.
So, then the pensions go unpaid. That is clearly a lot of hardship for people relying on them ..
It's hard for me to see this ending anyway except a bail-out. "Evil Republicans want to let poor old Pureto-Rican pensioners starve", that always works with the squishy cusckservatives.
So, maybe the bankruptcy is the way to go?
Too big to fail...too big to jail.
Big surprise, not. We said they would eons ago.
BOHICA.
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