[Congressional Record Volume 162, Number 24 (Wednesday, February 10, 2016)]
[House]
[Page H654]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 FORTHCOMING LEGISLATION ON PUERTO RICO

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Puerto Rico (Mr. Pierluisi) for 5 minutes.
  Mr. PIERLUISI. Mr. Speaker, Congress will hold its eighth hearing on 
Puerto Rico later this month. At the direction of Speaker Ryan, the 
Natural Resources Committee will then lead an effort to craft 
legislation for the territory. The record will demonstrate that there 
is not a single crisis in Puerto Rico, but a series of intertwined 
crises. It is an economic crisis, a fiscal crisis, a liquidity crisis, 
a debt crisis, an immigration crisis, and a public administration 
crisis.
  If you visualize Puerto Rico as a tree and each crisis as a withering 
branch, the root of the tree is Puerto Rico's unequal and undignified 
political status. While the immediate aim is to mend the branches, 
ultimately, we will need to attack the problem at its root and that 
means Puerto Rico must become a State or a sovereign nation.
  Last week, Antonio Weiss, a senior Treasury Department official, 
stated as follows:

       There is no question that status is vitally important. Why 
     are we proposing that restructuring authorities and the 
     earned income tax credit and fair Medicaid treatment be 
     provided to Puerto Rico? Well, as a territory, Puerto Rico's 
     status does not afford it adequate tools in those three 
     areas. So we believe that we need to afford the Commonwealth 
     those tools that it needs so it can navigate this crisis. And 
     we agree that over a long period of time, status has 
     contributed to this crisis.

  Since the problem in Puerto Rico has multiple dimensions, the 
legislative solution should as well. First, the bill must empower 
Puerto Rico to restructure a meaningful portion of its debt. The bill 
could provide a period in which consensual negotiations between bond 
insurers and their creditors, mediated by neutral experts, can take 
place. If those negotiations do not bear fruit, the Puerto Rico 
Government should be empowered to authorize its instrumentalities to 
adjust their debts under chapter 9 of the Federal Bankruptcy Code, a 
right that every State has and that Puerto Rico used to have.
  Puerto Rico's congressionally approved constitution provides that 
bonds issued or guaranteed by the central government receive priority 
payment. What binds us together as Americans--and Puerto Ricans are 
proud American citizens--is our commitment to the rule of law.
  While I do not believe that Congress should override Puerto Rico's 
constitution, I do expect all creditor classes, including GO 
bondholders, to make concessions for the public good that will 
ultimately benefit all stakeholders. I sense that a bipartisan 
consensus is finally emerging in support of reasonable debt 
restructuring authority for Puerto Rico.
  Second, the bill should address the outrageous disparities that 
Puerto Rico faces under key Federal programs, a main driver of our 
deficits and debt. Consider that historically, Puerto Rico received 
$300 billion in annual Medicaid funding, while the similarly sized 
Oregon receives $5 billion. I challenge any State to run a decent 
Medicaid program with that insulting sum without overborrowing in the 
capital markets. Impossible.
  Finally, the Puerto Rico Government has a record of fiscal 
mismanagement. This is a painful fact, but a fact nonetheless. We must 
face up to it, resolve to do better, and welcome some temporary 
assistance. I would support the creation of an independent board to 
approve Puerto Rico Government's financial plan and annual budgets and 
to help ensure they are adhered to.
  The past is not always a prologue. There is no reason why future 
Puerto Rico leaders cannot embrace fiscal discipline, as distinct from 
austerity, and rapidly put the oversight board out of business. And 
Congress should be careful about casting moral judgment on Puerto Rico 
since the Federal Government has a $14 trillion debt that is 75 percent 
of the GDP. We, in Puerto Rico, are responsible for our actions, but 
Congress is responsible for its actions and inaction as well.
  A balanced board will obtain buy-in from government, business, and 
labor leaders in Puerto Rico and can serve as a bridge to a brighter 
future. However, a punitive board that disrespects my constituents and 
tramples on the principle of states' rights will transform me from an 
ally to an adversary very quickly.

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