Congressional Record, Volume 162 Issue 105 (Wednesday, June 29, 2016)

[Congressional Record Volume 162, Number 105 (Wednesday, June 29, 2016)]
[Senate]
[Pages S4690-S4699]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

NATIONAL SEA GRANT COLLEGE PROGRAM AMENDMENTS ACT OF 2015--Continued

Mr. McCONNELL. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. McCONNELL. Mr. President, I ask unanimous consent that
notwithstanding rule XXII, there be 5 hours of time equally divided
between the two leaders or their designees; further, that Senator
Menendez or his designee be recognized to make a motion to table the
motion to concur with amendment No. 4865, and that Senator Sanders or
his designee be recognized to make a budget point of order, and that
Senator McConnell or his designee be recognized to make a motion to
waive the point of order; further, that following the use or yielding
back of the 5 hours of debate, the Senate vote on the motions in the
order listed; finally, that if the motion to table is not successful,
then following disposition of the motion to waive, the remaining
postcloture time be yielded back, the motion to concur with amendment
be withdrawn, and the Senate vote on the motion to concur in the House
amendment with no further intervening action or debate.
The PRESIDING OFFICER. Is there objection?
Mr. REID. Reserving the right to object.
The PRESIDING OFFICER. The Democratic leader.
Mr. REID. Mr. President, the Democrats have 150 minutes. I ask
unanimous consent that that be divided as 40 minutes for Menendez, 40
minutes for Sanders, 10 minutes for Cantwell, 10 minutes for Heitkamp,
and 50 minutes for proponents of the legislation.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. REID. Mr. President, further reserving my right to object, I
would also say that just because you have the time, you don't have to
use it. I would hope Senators on both sides would understand that the
sooner we get to the votes, the better off we will be.
I would also say this. I appreciate on my side the work done by
Senator Manchin of West Virginia. That State, in the last few weeks--
actually, for the last few months--has been hit harder than any State
deserves to be hit. It is just awful what has happened there. Senator
Manchin has been stalwart in recognizing the work he has to do there.
We understand his advocacy for years now--especially the last few
months--on the miners, their pensions, and health care benefits. We
recognize that. We think we have ways of helping him, and we have
something worked out we think is appropriate, and we have discussed
that with him.
I would also recognize Senator Sanders. Everyone knows the fervency
of his opinion on a number of different things, and he certainly has
one on this matter, and he has 40 minutes to explain that. We
appreciate his cooperation.
The person who has been a voice on Puerto Rico for more than the last
few months--for years--has been Bob Menendez from New Jersey. He has
been very articulate in all the caucuses we have had where we have
discussed this and on the floor. I admire his feelings on this.
I wish I could say we have solved all of his problems. We have not
been able to do that, but I certainly want everyone to know he has done
a terrific job of recognizing, in his opinion, what is wrong with this
legislation. There is no one better to articulate that position than
Bob Menendez.
Senator Cantwell has worked very hard on this legislation with the
chair of the Energy Committee, the senior Senator from Alaska. They
have worked very hard. They had a way forward, but they couldn't get it
done. They are going to continue to work on putting something together.
We need more of that.
We have an Energy bill coming up. We hope we can work something out
to get to conference on that and move forward on that. That is a bill
that is years overdue. We have been trying to do that for almost 5
years. So I hope we can work something out.
Senator Heitkamp is going to come and give us her opinion on what we
should do on Ex-Im Bank. She has been articulate and working with
Senator Cantwell on that.
I appreciate the work of the Republican leader, and his assistant,
the senior Senator from Texas. This has been kind of a difficult issue
for everybody. We all didn't get what we wanted. That includes
Democrats and Republicans. I wish we could have done better, but this
is what we got from the House, which had been worked on over there with
the Republicans, with the Speaker, with Leader Pelosi, and the
President's people. This is what we have, and we have had to work
through this to do what we could do.
I wish we could have done more, but I am satisfied that this is going
to be a broad, broad step forward to help the people of Puerto Rico,
who are desperate for help.
I have no objection.
The PRESIDING OFFICER. Is there objection to the majority leader's
request?
Without objection, it is so ordered.
The majority leader.
Mr. McCONNELL. Mr. President, for the information of our colleagues,
this sets up three votes that will allow us to finish the bill later in
the day. But I would remind everyone that we have a briefing from 4 to
5 on the ISIL issue, which I would encourage all of our Members to
attend.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. SANDERS. Mr. President, I rise in very strong opposition to the
Puerto Rico Oversight, Management, and Economic Stability Act, the so-
called

[[Page S4691]]

PROMESA Act. This is a terrible piece of legislation, setting horrific
precedent, and it must not be passed.
The United States of America should not treat Puerto Rico as a
colony. We cannot and must not take away the democratic rights of the
3.5 million Americans of Puerto Rico and give virtually all power on
that island to a 7-member board that will be dominated, as it happens,
by 4 Republicans. This legislation strips away the most important
powers of the democratically elected officials of Puerto Rico, the
Governor, the Legislature, and the municipal governments as well. We
must not allow that to happen.
This is not what the United States of America is supposed to be
about, and this is not how we should treat a territory in the year
2016. The bottom line is that the United States must not become a
colonial master, which is precisely what this legislation allows. Any
decisions that are made regarding the future of Puerto Rico must be
made by the people of that island and their elected officials.
This legislation, I should add, is not just about taking away the
democratic rights of the people of Puerto Rico. It is about punishing
them economically. Since 2006, Puerto Rico has been in the midst of a
major economic depression. In the last 10 years, Puerto Rico has lost
20 percent of its jobs. About 60 percent of Puerto Rico's adult
population is either unemployed or has given up looking for work. Over
the last 5 years alone, more than 150 public schools have been shut
down and the childhood poverty rate in Puerto Rico is now 58 percent.
There is a mass migration out of Puerto Rico to the mainland of
professionals because there is simply no work on the island.
In the midst of this human suffering and economic turmoil, it is
morally repugnant that billionaire hedge fund managers on Wall Street
are demanding that Puerto Rico fire teachers, close schools, cut
pensions, and lower the minimum wage so that they can reap huge profits
off the suffering and misery of the American citizens on that island.
We have to understand that Puerto Rico's $70 billion in debt is
unsustainable and unpayable. That is just a fact. You cannot get blood
out of a stone. The reason--or one of the major reasons that it is
unpayable--has a lot to do with the greed of Wall Street vulture funds.
In recent years, vulture funds have purchased a significant amount of
Puerto Rico's debt. In fact, it has been estimated that over one-third
of Puerto Rico's debt is now owned by these vulture funds that are
getting interest rates of up to 34 percent on tax-exempt bonds they
purchased for as little as 29 cents on the dollar. Let me repeat that.
Vulture funds are getting interest rates of up to 34 percent on tax-
exempt bonds they purchased for as little as 29 cents on the dollar.
Let us be clear. This issue is a significant part of what the entire
debate regarding Puerto Rico is about. Billionaire hedge fund managers
who purchased Puerto Rican bonds for pennies on the dollar now want a
100-percent return on their investment, while schools are being shut
down in Puerto Rico, while pensions are being threatened with cuts,
while children on the island go hungry. That is morally unacceptable.
That should not be allowed by the Congress.
It is bad enough for Republicans in the House to write legislation
that takes away the democratic rights of U.S. citizens living in Puerto
Rico, but adding insult to injury, this legislation does something even
more insulting. At a time when health, education, and nutrition
programs will likely be cut, this legislation, if you can believe it,
requires the taxpayers of Puerto Rico to pay for the financial control
board at the unbelievable sum of $370 million in order to fund the
control board's bureaucracy.
So think about it for a second. The control board will likely cut
programs for the elderly, the children, the sick, and the poor, on an
island where 58 percent of the children are already living in poverty
because Puerto Rico does not have enough money to take care of its most
vulnerable people. In the midst of all that, $370 million is going to
be sucked away from Puerto Rico in order to pay for the administration
of the financial control board. This, to me, is literally beyond
belief.
Puerto Rico must be given the time it needs to grow its economy, to
create jobs, to reduce its poverty rate, and to expand its tax base so
that it can pay back its debt in a way that is fair and just. In my
view, we need austerity--not for the people of Puerto Rico but for the
billionaire Wall Street hedge fund managers who have exacerbated the
financial crisis on the island. We must tell them loudly and clearly
that they cannot get everything they want while workers in Puerto Rico
are fired, while schools are shut down, while health care is
underfunded, and while children on that island live in poverty.
I am very disappointed that this extremely important piece of
legislation is being pushed through Congress without allowing any
amendments here in the Senate. That is not the way we should be doing
business.
If allowed, I will offer an amendment in the form of legislation that
I have introduced--legislation that would allow Puerto Rico's debt to
be structured through the creation of a reconstruction finance
corporation.
Let's never forget that in 2008, when Wall Street's greed,
recklessness, and illegal behavior nearly destroyed our economy, the
Federal Reserve provided $16 trillion in virtually zero--zero--interest
loans to every major financial institution in this country, as well as
central banks and corporations throughout the world. If the Federal
Reserve and the Treasury Department could move quickly to stabilize our
economy and global markets in 2008, we can surely help the 3.5 million
American citizens in Puerto Rico who are hurting today. The Fed can and
should provide low-interest loans to Puerto Rico and facilitate an
orderly restructuring of Puerto Rico's debt.
This legislation is both a political and economic disaster for the
people of Puerto Rico. This legislation takes away their democratic
rights and self-governance and will impose harsh austerity measures,
which will make the poorest people in Puerto Rico even poorer. This is
legislation that should not be passed by the Congress.
I rise to offer a point of order against this legislation.
Mr. President, I understand that the Republican representative will
be coming down in a few moments, so I will reserve my time and reclaim
the floor in a few minutes when the Republican representative is here.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. SANDERS. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SANDERS. Mr. President, I rise to raise a point of order against
this legislation and make a point of order that the pending motion to
concur violates section 425(a)(2) of the Congressional Budget Act of
1974.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, pursuant to section 904 of the
Congressional Budget Act of 1974 and the waiver provisions of
applicable budget resolutions, I move to waive all applicable sections
of that act and applicable budget resolutions for purposes of the
motion to concur in the House amendment to S. 2328, and I ask for the
yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Mr. SANDERS. Mr. President, I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, as we all now know, the government of
Puerto Rico has run up an astounding debt of around $70 billion and has
more than $40 billion in virtually unfunded pension promises. To
address this financial challenge, the Senate has taken up legislation
to provide greater oversight of the territory's finances and some broad
debt-resolution authority.
That bill, which the authors entitled the ``Puerto Rico Oversight,
Management, and Economic Stability Act,'' or PROMESA, is certainly not
something I would have written and in many areas leaves a lot to be
desired. Nonetheless, I voted to invoke cloture on

[[Page S4692]]

the bill because, thanks to the stubbornness of the Treasury Department
and lack of transparency from the government of Puerto Rico, it is the
only option on the table, and delaying action would only hurt the
Americans who reside on the island.
Astoundingly, the government of Puerto Rico has not provided audited
financial statements since 2013, despite its responsibilities to do so
under continuing disclosure requirements and multiple requests from
Congress and investors. The territory's debt challenges have been
center stage here in Congress for about a year now, and throughout that
time we have received only stale, largely useless, and untrustworthy
information regarding Puerto Rico's finances. In fact, some of the
disclosures have been downright insulting.
For example, earlier this year I submitted a number of detailed
questions to the Governor of Puerto Rico about the state of the
island's finances. One of my questions was very straightforward: ``What
component units of Puerto Rico's government has issued debt, and how
much does each owe?'' Amazingly, the Governor, in a delayed response,
answered that simple question with a quote from an outdated report
issued by the Federal Reserve Bank of New York.
In other words, the very government that issued the debt would not
even provide information on what it owes and instead quoted a third
party. This is not an isolated incident. Throughout this public
discussion, we have yet to get anything resembling a firsthand account
of the true fiscal situation in Puerto Rico. In fact, this lack of
transparency--and that is putting it kindly--has gone on for years.
Lately, however, Puerto Rico's withholding of information seems to have
been strategic and part of a legislative strategy in concert with the
Treasury Department.
The U.S. Treasury Department was given authority to provide technical
assistance to Puerto Rico but evidently has not advised Puerto Rico's
government to open its books. In addition, despite numerous requests I
have made to Treasury to provide briefings on the nature of their
technical assistance, they have, so far, refused to provide any such
insight.
We have heard calls from various sources, including Members of the
Senate, for the Securities and Exchange Commission to investigate
actions taken on the part of private investors in relation to Puerto
Rico's debt crisis. Given the apparent coordination between Treasury
and the government of Puerto Rico and the overall lack of information
we have about the current state of the territory's debt and finances, I
sent a letter this week to the SEC asking that actions and inaction by
government officials be included in any investigation into Puerto
Rico's debt.
Today I also sent a letter to Treasury Secretary Lew inquiring about
reported confidentiality agreements Treasury officials have signed with
component units of Puerto Rico's government. The existence of such
agreements raises many questions, and disturbing reports that Treasury
officials may have impeded negotiations between Puerto Rico and its
creditors in order to get a better legislative outcome in Congress
raises even more questions.
With respect to Puerto Rico, the Obama administration is and has been
interested in one thing and one thing only: obtaining the broadest and
most comprehensive debt resolution authority for Puerto Rico possible,
in an obvious attempt to favor public pensions in Puerto Rico. While I
tried last year to work with administration officials toward a
resolution for Puerto Rico, Treasury officials remained extraordinarily
rigid in their objectives.
Moreover, while that administration and many of my friends on the
other side have been very forthcoming in offering ideas of how to send
roughly $50 billion of extra health funds to Puerto Rico and nearly $10
billion in difficult-to-administer tax incentives, none of them have
been forthcoming about the actual cost of their proposal. They have
also persisted in identifying what they call ``health funding
inequities'' but never seem to want to own up to the fact they
purposefully included a cliff in health funding for Puerto Rico as a
part of ObamaCare.
This health funding cliff alone should be a clear indication to the
people of Puerto Rico that while the administration and my friends on
the other side of the aisle talk one way about how they care for the
people of Puerto Rico, they often act quite differently and give far
more attention and effort to protecting the interests of public sector
unions.
I have made clear all along my main objective has been to serve the
interests of the people of Puerto Rico, not the politicians on the
island or here in Washington, DC. That is why I voted to invoke cloture
on the legislation before us today, despite the rigidities of the Obama
administration and the government of Puerto Rico.
Unfortunately, we have been put in a position where, if this
legislation were to fail, there will only be more suffering for the
people of Puerto Rico. We cannot wait for another administration here
or on the island to finally get accurate and verified information on
Puerto Rico's finances. We cannot wait for the Obama administration to
start engaging reasonably with Congress about health care funding or
tax incentives for the island.
Therefore, in order to finally determine the true state of Puerto
Rico's finances and to provide relief from the massive indebtedness
accumulated by a profligate Puerto Rican government, I will, once
again, be voting yes on this bill. The bill does not have any
significant effect on the Federal deficit or our massive Federal debt,
which is a good thing. Unfortunately, it also will not have any
significant effect on Puerto Rico's economic growth, but it does
promise to finally uncover what is beneath the opaque, weblike
structure of the Puerto Rican government's finances, and if we are
actually going to be able to meaningfully address the island's
financial challenges, that will be a very important step.
The bill also has the potential to provide some debt relief which can
help the people of Puerto Rico, if effectively implemented and not used
simply as a way to funnel resources into public pension programs.
Despite reforms to pension programs touted by the Puerto Rican
government in recent years, the territory has not actually funded those
reforms. As a result, large public pension programs on the island
remain, in effect, entirely unreformed, still allowing for things like
government-subsidized loans to participants for cultural trips intended
for ``relaxation.''
Unfortunately, there has been a lot of other misinformation about
Puerto Rico's financial information put forward by some of my friends
on the other side of the aisle, by some administration officials who
know better, and by many in the House who could stand to learn more.
None of that, if we let it persist, will help the people of Puerto
Rico.
Let me close by agreeing with some remarks made yesterday by my
colleague and good friend Senator Cantwell, who correctly identified
that whatever happens today with PROMESA, issues surrounding Puerto
Rico are not going away.
I will note this legislation sets up a congressional task force to
consider impediments to growth in Puerto Rico, including those that may
stem from the Federal Government policies. Perhaps Senator Cantwell and
I could serve together on the task force. In principle, the task force
can allow Congress to continue to address issues surrounding how
Federal tax and health care policies affect Puerto Rico and how changes
could possibly influence growth.
To be clear, I believe this task force could be useful only if both
sides of the aisle are willing to seriously discuss ideas beyond
sending tens of billions of dollars to Puerto Rico. If the task force
will only consider a wish list of Federal spending, I don't see it
accomplishing all that much for the people living in Puerto Rico.
In any event, it is long past time for holding out hope the
government of Puerto Rico will provide accurate financial information.
Similarly, it is likely a fruitless endeavor to keep waiting on the
Obama administration to move away from its rigid focus on obtaining
broad debt restructuring authority for Puerto Rico. We should not hold
the people of Puerto Rico hostage to the rigidities of self-interested
politicians, neither here nor in the territory. Consequently, I plan to
support PROMESA, despite its shortcomings. I urge my colleagues to do
the same. I

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appreciate the honest and decent people of Puerto Rico and wish them
the very best and hope this bill will help them get on the path that
will cause that great and beautiful place to be even better.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Toomey). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. MENENDEZ. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MENENDEZ. Mr. President, I ask the Presiding Officer to advise me
when I have used 25 minutes of my time.
The PRESIDING OFFICER. The Senator will be so notified.
Mr. MENENDEZ. Mr. President, I have come to the floor time and time
again on this issue with a simple message: PROMESA, which is the
Spanish word for promise, is not a promise; it is a power play leaving
the people of Puerto Rico unable to manage their own government, make
their own decisions, and do what they believe is necessary for their
own future. In the case of Puerto Rico, we have decided not to help
them make their own decisions but to take the powers of governing away
from them.
While I have filed many amendments, unfortunately my colleagues seem
to have thrown up their hands and said this bill cannot get any better,
we will not even try to do the people's work and have actual debate and
votes in the Senate.
I would note that calls for a thorough debate on the Senate floor
were bipartisan in nature. I would remind my colleagues that each one
of us was elected to this very Chamber to debate and enact legislation
to improve the lives of Americans, and that includes the 3.5 million
American citizens living in Puerto Rico.
I know proponents of the bill have argued, supporting an amendment
process would force Puerto Rico to default and have serious
repercussions for its people, but they are simply mistaken. The truth
is, the legislation we are considering will include a retroactive stay
on litigation, meaning any lawsuit filed before July 1 will be halted
and any judgments unenforceable. As a matter of fact, any lawsuits that
take place or any judicial decisions that take place, once the
legislation is passed and signed by the President--it will be
retroactive to December of last year. That will be stopped. As the bill
states, the stay bars ``the commencement or continuation'' of suits to
recover ``claims'' against Puerto Rico. It also bars ``enforcement . .
. of a judgment obtained before the enactment'' of the bill.
In addition, section 362 of the Bankruptcy Code, which is
incorporated by reference into this bill that we are considering, bars
the ``enforcement . . . of a judgment obtained before'' filing for
bankruptcy once the board files a bankruptcy petition on Puerto Rico's
behalf to restructure their debt. Even if this apocalyptic scenario the
proponents of the bill want to use to drive this bill through--if hedge
funds win a judgment before the stay is enacted, that judgment cannot
be enforced once the law is passed. Once the debt adjustment plan is
confirmed, the judgment can actually be discharged.
The Third Circuit Court of Appeals, which has jurisdiction over
Puerto Rico, held in 2012: ``Even if [an] injunction is not a claim
[for purpose of the bar against `commencement or continuation' of
`claims'], any action to enforce [an injunction] is subject to the stay
and cannot proceed without relief from the stay.''
What does that basically mean? Any action to enforce is subject to
the stay and cannot proceed without relief from the stay. The stay is
the legislation we are passing. So all of this suggesting that we have
to drive into a set of circumstances with a bad bill is not the
reality.
Time is of the essence as it relates to Congress acting swiftly, but
we shouldn't allow a somewhat arbitrary deadline to force through a
fundamentally flawed bill, as the retroactive stay gives us the time to
get it right. July 1 shouldn't be used as an excuse to abdicate our
responsibilities as U.S. Senators.
Adoption of the motion to table, which I will make later, can still
find a reasonable middle ground to truly help solve the crisis and the
humanitarian catastrophe that awaits the people of Puerto Rico rather
than simply ignoring their sovereignty and choosing the road to
colonialism. While hope is getting dim, we still have one last
opportunity to do right by the people of Puerto Rico. I will attempt to
table a pending amendment in order to have the opportunity to replace
that amendment if we succeed in going ahead and tabling it to get a
vote on one of my amendments.
While that may seem a little bit confusing as a procedural vote,
basically what I am saying is if you vote for my motion to table, you
are giving me an opportunity to have an amendment I plan to offer in
its place.
If we succeed, the majority leader might try to slip in another
amendment, but at the end of the day, we will know the whole purpose of
tabling is to offer an amendment to improve this legislation. Why must
we improve this legislation? Let me go through what is wrong with this
law.
This creates an oversight board. The board, according to the report
by the House Natural Resources Committee--I did not say this; it is the
official document of the House of Representatives, which passed this
bill. It says: ``The board would have broad sovereign powers''--
sovereign powers means it has total authority on its own--``to
effectively overrule decisions by Puerto Rico's legislature, governor
and other public authorities.'' These are the people who were elected
by the 3.5 million citizens of Puerto Rico, U.S. citizens, to determine
their future, but, no, the board is going to overrule them and have the
sovereign power to do so.
Secondly, the oversight board ``can effectively nullify''--nullify
means end--``any new laws or policies adopted by Puerto Rico that did
not conform to requirements specified in the bill.'' The board can
nullify a sovereign government's opportunity to pass laws as elected by
the people. The consent of its government, the essence of democracy--
well, we are nullifying that.
The control board, as I call it--and I will speak about why it is
control and not oversight. These things speak to controls, not
oversight. It says the control board ``may impose mandatory cuts on
Puerto Rico's government and instrumentalities--a power far beyond that
exercised by the Control Board established for the District of
Columbia.'' Again, that is from the House Natural Resources Committee
report--``a power far beyond that exercised by the Control Board
established for the District of Columbia.''
They can say: Sorry, Puerto Rico, we know you put your budget
together, we know the legislature passed it, and we know the Governor
signed it, but we think you have to cut in these areas of education,
you have to cut in these areas of health care, and you have to cut in
these areas of public safety.
They have the power to decide mandatorily that these cuts must take
place.
With respect to the government of Puerto Rico and its
instrumentalities, which means subdivisions, it can make appropriate
reductions in nondebt expenditures. That is very important. Anything
that is considered as an expenditure to pay the debt is held sacrosanct
and can't be touched, but as far as nondebt expenditures, this board
can say: This is where you will make the cuts. What are those nondebt
expenditures? They are education, health care, public safety, senior
citizens, and all of the things we think about to protect the people in
our society. It has sole discretion over the budget.
``The Oversight Board shall determine in its sole discretion''--a
phrase used nearly 30 times throughout the bill, which means we are not
defining what that means. Sole discretion, as commonsense, means they
themselves can determine what is appropriate, whether each proposed
budget is compliant with the applicable fiscal plan in their sole
discretion even if that discretion is arbitrary and capricious. It has
the sole discretion to grant or deny restructuring.
Why are we even considering legislation? The whole purpose of our
legislation is to give Puerto Rico a pathway to restructuring in the
bankruptcy court, where the bankruptcy court and the Federal laws would
take over, but

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we created a series of problems to that restructuring.
The oversight board certifies a plan of adjustment only if it
determines in its sole discretion that it is consistent with the
applicable certified fiscal plan. Again, they could be arbitrary and
capricious.
This board, which has no representation from Puerto Rico that comes
from the Puerto Rican people--it will have one person who either has
their primary residence or their primary business in Puerto Rico, but
they could have a primary business and not live there and make dictates
about the people of Puerto Rico. And this person doesn't come from the
Governor and legislature of Puerto Rico, representing the Puerto Rican
people.
This board that has control over their entire lives, which includes
their budgets, fiscal plan, the ability to make mandatory cuts, and the
ability to impose all types of things that a governing body, in
essence, would do--guess who pays for this oversight board, which
includes seven unelected and unaccountable people? Puerto Rico pays for
it.
``Within 30 days after the date of enactment, the territorial
government shall designate a dedicated funding source''--meaning a
source only to pay for this--``not subject to legislative
appropriations.'' Guess what the estimate of that is. This is the
Congressional Budget Office. It says Puerto Rico will have to pay about
$370 million for this control board. Here is an island that doesn't
have the money to meet some of the basic necessities that we heard so
eloquently talked about on both sides of the aisle, but we are going to
impose at least another $370 million--as is estimated by the
Congressional Budget Office--on them for a control board that they have
no say over.
They have no oversight over the control board. Neither the Governor,
nor the legislature can exercise any control, supervision, or
oversight, but they get to pay the $370 million, and they have to live
with all the dictates of the control board even though they don't have
representation.
To further make sure the control board is even more omnipotent, they
put in a no-liability clause. ``The Oversight Board, its members and
its employees shall not be liable for any obligation of or any claim
against the Oversight Board or its members or employees or the
territorial government resulting from actions taken to carry out this
act.'' They have absolute immunity. Wow. Wouldn't we all like to have
that.
My amendment is targeted at improving the most egregious flaws of
this legislation. My amendment would ensure that the people of Puerto
Rico have a voice in their future. The current legislation denies the
Puerto Rican people any representation on a board that effectively
replaces the decisionmaking powers of the legislative and executive
branches of their democratically elected government. It imposes the
board on Puerto Rico without ever consulting the people of Puerto Rico.
My amendment makes two critical changes to protect Puerto Rico's
sovereignty and democratic rights. Under my amendment, if we get to it
through the motion to table, Puerto Rico will decide for itself whether
it will access restructuring and accept the control board, thus
preserving the people's voice in the process.
Second, my amendment adds two additional voting members to the board
chosen by the elected representatives of the people of Puerto Rico.
These two additional members would be chosen by the President from a
list of four candidates submitted by the Governor of Puerto Rico with
the advice and consent of the Legislature of Puerto Rico. Republicans
will still appoint the majority of members from an ideological
perspective. I personally believe that all of the members of the board
should be chosen by the people of Puerto Rico or their elected
representatives, but I want to be reasonable and open to compromise,
which is why my amendment only requires two members of a nine-member
board to be chosen by Puerto Rico. Certainly we can all agree that the
people who have to deal with all of the consequences of this board's
decisions should have some say as to who is making those decisions.
My amendment would also protect senior citizens and avoid an increase
in elderly poverty. PROMESA currently includes a vague and undefined
requirement to provide adequate funding for public pension systems. Our
amendment would ensure that senior retirees and pensioners are
protected from the whims of the control board. After all, the retirees
in Puerto Rico, who spent 30 years serving the island as police
officers, firefighters, teachers, and nurses, didn't have any choice
but to participate in the pension plan; it was mandatory. Unlike hedge
funds that were able to pick and choose what investments to make and
often bought bonds at pennies on the dollar, public servants had to
participate in the pension system. They had no way of knowing that
their nest egg, for which they worked their entire lives, was at risk
of being taken away. They didn't contribute to the fiscal problems
facing Puerto Rico, and they didn't borrow too much or fail to make
annual contributions to the fund, so why should they lose their
retirement funds?
Besides the fundamental flaws with the control board and the failure
to provide critical protections for seniors and retirees, this bill
also fails to provide a clear pathway to restructuring, which is the
whole purpose of this legislation and this debate to begin with. The
unelected control board created in this bill will have the ultimate
authority to decide whether Puerto Rico's debts are even worthy of
restructure.
Let's not fool ourselves into believing that is a sure thing, that
this bill guarantees the island the ability to restructure its debts.
Indeed, section 206 of the bill lists four gatekeeping requirements
before any restructuring can occur. It must have engaged in good-faith
efforts to reach a consensual agreement with creditors, it must
establish a system to develop and make public timely audited financial
reports, and it must adopt a fiscal plan approved by the board. But
even if Puerto Rico meets and fulfills these requirements, there is
still an additional, even higher hurdle it must meet to access
restructuring. Instead, the fourth gatekeeping requirement in the
PROMESA legislation requires a supermajority of a 5-to-2 vote by the
control board in order for any of the island's debts to be
restructured. When you call for a supermajority, it means that a
minority of that seven--three people--may be ideologically opposed to
the concept of restructuring or allowing Puerto Rico to get access to
the bankruptcy court and could derail the island's attempts to achieve
sustainable debt payments.
Without any authority to restructure its debt, all this legislation
will do is take away the democratic rights of 3.5 million Americans and
leave the future to wishful thinking and a prayer that the crisis will
somehow be resolved.
Instead of leaving this critical decision up to the whims of a
minority of the board, my amendment would provide a clear path to
restructuring by removing this arbitrary vote requirement. Instead,
under my amendment, the government or instrumentality would be able to
restructure its debts once it completed the first three gatekeeping
requirements. Since the main purpose of this bill is to give Puerto
Rico the tools to restructure all of its debts, why would we leave this
authority to chance?
In addition to the undemocratic control board and an obfuscated path
to restructuring, I have serious concerns that the bill would actually
increase poverty and out-migration rather than stem both. That is
because it provides an exception to the Federal minimum wage for
younger workers, and it exempts the island from recently finalized
overtime protections. At a time when we are seeking to increase
workers' wages, PROMESA goes in the opposite direction and actually
cuts them.
It amazes me that the solution to getting Puerto Rico's economy
growing again is to ensure that workers make even less money. Lowering
people's wages is not a pro-growth strategy; it is a pro-migration
strategy because anyone who lives on the island of Puerto Rico and is a
U.S. citizen can take a JetBlue flight to the United States and will
then have overtime and minimum wage protections. It they are a senior,
they will have full Medicare protection. If they are indigent, they
will have Medicaid protections. They would have just about everything
every other U.S. citizen would have.

[[Page S4695]]

All these provisions would do is intensify out-migration to the
mainland, where Puerto Ricans are eligible for everything I just
discussed. That is why my amendment strips these offensive and
unrelated riders out of this bill.
I urge my colleagues to support these commonsense improvements to the
bill by voting for my motion to table.
I have known for the past several weeks--well, maybe months since I
started coming to the floor in September of last year and then urgently
several times in December of last year to say now is the time to act so
we are not up against an emergent situation--but, no, I guess the 3.5
million citizens of Puerto Rico did not deserve the type of attention
and urgency we, as Members of Congress, should have given to them. I
understood that for that period of time, the deck was stacked against
the people of Puerto Rico, but I am not ready to give up just yet.
Put simply, PROMESA exacts a price far too high for relief that is
far too uncertain. If we throw our hands up in the air and refuse to
make changes to this wholly inferior bill, which we can protect by the
retroactive nature that we have already put in the legislation to stay
any judgments, we will cast a dark shadow on the future of Puerto Rico.
A vote against tabling my motion, against tabling the pending
amendment, is a vote to disenfranchise 3.5 million Americans. It is a
vote to authorize an unelected and all-powerful control board that
could close schools, shutter hospitals, and cut senior citizens'
pensions to the bone. It is a vote to force Puerto Rico, without their
say, to go $370 million further in debt to pay for this omnipotent
control board which they don't even want. It is a vote to cut the
minimum wage down to $4.25 per hour for younger workers in Puerto Rico.
It is a vote to make Puerto Ricans work long overtime hours without
fair compensation or protection. It is a vote to jeopardize collective
bargaining agreements. It is a vote to cut worker benefits and
privatize inherent government functions. It is a vote to place well-
heeled hedge funds and creditors ahead of the people. It is a vote to
give the board the power to sell off and commercialize natural
treasures that belong to the people of Puerto Rico. And at its worst,
it is a vote to authorize an unelected, unchecked, and all-powerful
control board that determines Puerto Rico's destiny for a generation or
more.

Let's be clear. The people of Puerto Rico find this board to be
offensive and disrespectful. In fact, according to a recent poll
commissioned by Puerto Rico's largest newspaper, El Nuevo Dia, 69
percent of all respondents opposed--69 percent--opposed the PROMESA
bill--the bill we are voting on today--while 54 percent opposed the
very idea of having an oversight board.
Their concerns are validated by the nonpartisan Congressional Budget
Office which, as I said earlier, says:

The board would have broad sovereign powers to effectively
overrule decisions by Puerto Rico's legislature, governor,
and other public authorities.
[It can] effectively nullify any new laws or policies
adopted by Puerto Rico that did not conform to requirements
specified in the bill.

Even the bill's own author noted in the committee report: ``[T]he
Oversight Board may impose mandatory cuts on Puerto Rico's government
and instrumentalities.''
If the board, in its sole discretion, as the bill cites 29 times,
uses the superpowers in this bill to make mandatory budget cuts that
harm the people of Puerto Rico, there is nothing anybody from Puerto
Rico can do about it.
And these powers aren't limited to just budget and fiscal policy. As
the bill states in section 205, the control board can submit
recommendations to the Governor on a wide range of issues, including
how Puerto Rico organizes its government agencies, how they meet the
pension obligations, what services the government delivers, how they
determine wage performance standards, and, perhaps most egregiously,
the control board can submit recommendations on ``the privatization and
commercialization of entities within the territorial government.''
While this section calls these comments recommendations, another
section allows the board to ``adopt appropriate recommendations''
submitted by the Oversight Board under section 205. So, in essence,
they can adopt the very essence of what they are saying is a
recommendation.
The board can decide to hold a fire sale and put Puerto Rican natural
wonders on the auction block to the highest bidder. Is that what the
people of Puerto Rico want? Is that what we want?
The fact is, this legislation puts balanced budgets and untested
ideology ahead of the health, safety, and well-being of children and
families similar to how the control board travesty unfolded in Flint.
Without their voices represented on the control board, there is nothing
the people of Puerto Rico will be able to do. The fact that the Puerto
Rican people will have absolutely no say over who is appointed or what
action they decide to take is clearly blatant neocolonialism.
I am afraid we are opening the floodgates for Puerto Rico to become a
laboratory for rightwing economic policies. Puerto Rico deserves much
more than to be the unwilling host of untested experiments in
austerity.
I am not advocating to completely remove all oversight powers. To the
contrary, I support helping Puerto Rico make informed, prudent
decisions that put it on a path to economic growth and solvency. But
despite its name, the oversight board envisioned by this bill doesn't
simply oversee; it directs, it commands, it controls. The control board
has final say on the fiscal plan, final say on the budget. It can veto
laws, contracts, rules, regulations, executive orders. It can even
mandate across-the-board budget cuts with no regard to the impact on
the people.
So mark my words. If we don't seize this opportunity to address this
crisis in a meaningful way, we will be right back here in a year,
picking up the pieces. So while it is absolutely clear that we need to
act and act decisively and expediently----
The PRESIDING OFFICER. The Senator has consumed 25 minutes.
Mr. MENENDEZ. I thank the Chair.
So while it is absolutely clear that we need to act and act
decisively and expediently to help our fellow citizens--U.S. citizens
in Puerto Rico--just as importantly, we need to get it right. Working
together and helping each other in a time of need is what this country
is all about. When a hurricane hits the Gulf Coast or a tornado ravages
the Midwest or when we see wildfires in the West, or we see what
happened in West Virginia, I don't stand here and ask how my
constituents in New Jersey were affected. Rather, I stand with my
fellow Americans and fight to provide relief, regardless of what State
or territory they are from.
So it seems to me there is a reason we call this country the United
States of America, and U.S. citizens enjoy the privilege of calling
America home. The 3.5 million U.S. citizens in Puerto Rico are also
part of that great American people.
As I have outlined, I have an amendment to make reasonable and
targeted improvements to this legislation so that workers get the
retirement they deserve, the people of Puerto Rico are protected from
egregious attacks on their pay, the island has unimpeded access to
restructure its debt, and, most importantly, the people of Puerto Rico
have a say in their future--the consent of the governed, the very
essence of what democracy is all about.

Motion to Concur With Amendment No. 4865

So, Mr. President, I move to table the motion to concur with
amendment No. 4865, and I ask for the yeas and nays on my motion.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Mr. MENENDEZ. Mr. President, with that, I reserve the remainder of my
time.
I yield the floor.
Mr. UDALL. Mr. President, once again, Congress has responded at the
last possible moment to a dire issue--in this case, the debt crisis in
Puerto Rico. Friday, July 1, is a critical deadline for the island
Commonwealth, the date when Puerto Rico must repay $1.9 billion in debt
service that it has repeatedly stated that it is unable to pay. If we
had failed to act, over 3.5 million Americans would have faced an
economic and humanitarian crisis.
The Commonwealth government has stated that, even after clawing back
revenues from other parts of the public

[[Page S4696]]

sector like education, health, and public safety, it will not have
sufficient resources to meet the entire debt service obligation due on
July 1. That is just a few short days from now.
On January 27 of this year, I joined 44 of my colleagues in the
Senate to urge Majority Leader McConnell to work with us and swiftly
enact legislation to give Puerto Rico access to the tools it needs to
address the debt crisis. Over 150 days later, the Senate is only just
beginning to act.
This Congress has dragged its feet on important issues, waiting until
we are right up against dangerous deadlines to take critical action.
Puerto Rico is just one example; funding to fight Zika is another. We
saw these problems on the horizon long ago; yet the majority allowed
the problem to build, permitted the crisis to grow, waited until the
last minute, and, in doing so, restricted the Senate's opportunity to
act.
The Senate has just passed the House-passed bill, the Puerto Rico
Oversight, Management, and Economic Stability Act. I understand that
this was a difficult issue on which the administration and Republicans
and Democrats struggled to agree. This bill is far from perfect, but
without it, the situation in Puerto Rico will worsen.
I share my colleagues' concerns about the unelected fiscal control
board. Cuts to public services and public safety for the benefit of
debt holders and financial speculators would be unacceptable. Also,
just as Republicans tried to use funding to fight Zika as cudgel to
push through cuts to the Affordable Care Act and reproductive health,
they now are using the crisis in Puerto Rico to chip away at
fundamental labor protections, such as overtime pay and the Federal
minimum wage.
I supported the bill with these substantial reservations because it
was critical to pass this legislation before July 1. The Senate would
have been able to exercise its right of careful consideration and
debate if this bill had been brought to the floor when we called for it
in January. But today, the time was up. I urge Congress to stop this
destructive pattern of procrastinating on difficult issues and waiting
until the eleventh hour to act on critical issues.
The PRESIDING OFFICER. The Senator from North Dakota.

Export-Import Bank

Ms. HEITKAMP. Mr. President, I ask unanimous consent to display a
replica of a wheel loader that is produced in North Dakota.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. HEITKAMP. Mr. President, it may seem like an odd request, but it
actually has a purpose because it reflects literally hundreds of jobs
in my State--really, hundreds of jobs across the country.
June 30 will be an anniversary that is really not worthy of
celebration; that is, it is the anniversary of when we literally shut
down the Export-Import Bank and made it unable to function for the
first time in its 80-year history.
Now, that may not seem like a lot. It may not seem as though it is
something we should be very concerned about, but I can tell my
colleagues that workers across our country--workers who work in
manufacturing, individuals whose livelihood depends on exports from our
country--know the impact today of this action, or inaction.
Despite the fact that Congress reauthorized the agency six months
ago, the Ex-Im Bank has been hamstrung from supporting American jobs
and businesses because there isn't a quorum on the Ex-Im Bank. For
decades, the Export-Import Bank has helped level the playing field for
American businesses and American workers, and it is past time for
politics to stop dictating whether, in fact, the Bank can do its job.
The current nominee to the Ex-Im Bank Board--the nominee that would,
in fact, provide a quorum--was nominated not by a liberal Democrat, not
by the President, but instead was the Republican nominee to the Ex-Im
Bank Board. His name is Mark McWatters. His nomination is currently
pending in the Senate Banking Committee, and the Senate Banking
Committee chairman has told us in no uncertain terms he will not bring
up the McWatters vote in the committee because of his own personal
opposition to the Ex-Im Bank. Again, despite the fact that 64
Republican and Democratic Senators, along with 70 percent of the
Representatives in the House of Representatives, voted last year to
reauthorize the Ex-Im Bank.
If we do not take this step--if we do not, in fact, get the Bank up
and running--we will continue to do what we have been talking about,
which is pink-slipping the American manufacturing workers.
So here we are today to recommend that this body take action so that
no more workers--no more hard-working manufacturing Americans--are
prevented from doing their job and are given pink slips and laid off.
When we look at where we were last year and the challenges that we
had, we had an all-out debate. A lot of people say there wasn't a
debate on this; we didn't get a chance to air our grievances. That is
strictly nonsense. We fought this issue very hard, had many, many floor
debates, many, many floor discussions about this, and at the end of the
day, the vast majority of this body voted to reauthorize and put the
Ex-Im Bank back to work.
So why are we in the spot we are in today? Because we cannot do any
credit over $10 million without approval of a bank board. It cannot be
done unilaterally. As a result, many, many credits--in fact, $2 billion
worth of activity--are pending in the pipeline at the Ex-Im Bank.
When we look at many of the big companies across this country, a lot
of times people will say ``Well, that is just about this company or
that company''; fill in whatever big name corporation you want to. But
the bottom line is this isn't just about those companies; it is about a
supply chain that goes all the way down States as small as North
Dakota.
If you look at Boeing, for instance, and you look at what the impact
is on Boeing and what that means for our producers, Boeing currently
has 16 suppliers in North Dakota, which will lose out--not just could
lose out but will lose out--if Boeing doesn't get enough support from
the Ex-Im Bank to sustain its operations and to continue to produce its
planes with American workers.
Today I bring this wheel loader to the floor of the Senate, and I do
that because this demonstrates the effect that this lack of activity on
this nomination will have on Case New Holland in my State.
Case New Holland has a dealer in New Jersey called Hoffman Equipment
that has secured an $80 million deal with the country of Cameroon. The
only way Cameroon can afford this deal is if they use Ex-Im financing.
If the deal doesn't go through, facilities in three States will lose.
So who are those? Take today North Dakota, where we produce these wheel
loaders in Fargo.
The great irony of this is that as we have been challenged in our
agriculture economy and agriculture manufacturing, guess what.
Agriculture manufacturing is down, in part because we stimulated a lot
of purchases back when the economy was good in farm country. But I will
tell you that 70 people just in the last couple of weeks have been laid
off at Case in Fargo.
Think of what is going to happen if we lose this sale. Think of what
will happen to workers in Iowa if they lose the sale for the backhoes
that are produced in Iowa by Case. Think about what is going to happen
in Kansas if we lose the skid steer portion of that Cameroon sale.
I will tell you every day we are losing jobs because of the inability
of the Ex-Im Bank to do its job in promoting and guaranteeing that
American manufactured products find their way into the global
marketplace.
GE announced in June that it will receive financing from the French
export credit agency to support exports that will be made in France now
rather than the United States. So the French credit export agency will
be providing an additional line of credit for gas turbines that will be
produced not in the United States but will be produced in France and
exported to countries such as Saudi Arabia, Mexico, and Brazil. As a
result, GE will invest $40 million in the French economy instead of
investing $40 million in the American economy.
Do we know what that means? That means when we look at these jobs--
just translate $40 million, and we recognize a lot of that is input
costs, but one of

[[Page S4697]]

the major input costs in all of this is American workers. How can we
stand by and let this happen? How can we stand by and not fight for
these jobs for American manufacturers? There is no way we can come to
the floor and say we are for the American worker and not be for the
Export-Import Bank. No way can we come to the floor and say we are for
global competition that will put the best products into the
marketplace, which are American products, and not move the Bank
forward.

I am going to yield to my friend from the State of Washington or
yield to my friend from the great State of Iowa.
Ms. CANTWELL. Mr. President, I wanted to ask the Senator from North
Dakota a question, if I could. I see she has been out here with an
actual display.
It is quite amazing that we have to go to this level to bring up an
issue about jobs in our economy, but I admire the dedication of the
Senator from North Dakota in saying how important it is because we are
about to go home for another summer recess here in a few weeks and
everybody thought last year we were passing legislation that was going
to secure America's place in a global economy by making sure that
products we make can be sold in overseas markets.
The secret is, though, that there are now 30 transactions worth more
than $20 billion that aren't getting done simply because one Senator
refuses to let a nominee out of the committee. So one Senator is
holding up the sale of a product of which Senator Heitkamp has a
replica on her desk. They are holding up the sale of airplanes, and
they are holding up the sale of other products all because they don't
want to have a functioning board. We are here to ask our colleagues on
the other side of the aisle to help us break this logjam so we can sell
export products.
I was curious to ask the Senator from North Dakota because she was
mentioning how these transactions are happening now; that is, people
are deciding to move.
Mr. President, I ask unanimous consent to have printed in the Record
a New York Times article entitled ``A Single Senator Stymies the
Export-Import Bank.''
It says that about 2 weeks ago, GE was making an announcement that
they were going to expand manufacturing in France rather than in South
Carolina, how they were investing in the Czech Republic instead of in
Texas, and that jobs in South Carolina, Maine, and New York were also
getting transferred to other countries.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the New York Times, June 27, 2016]

A Single a Senator Stymies the Export-Import Bank

(By Jackie Calmes)

Washington.--Thursday is an ignominious anniversary for the
government agency that helps finance foreigners' purchases of
American exports. Thanks to a single senator, it has been a
full year since the 82-year-old Export-Import Bank could
approve deals exceeding $10 million, a limit that rules out
high-dollar deals on airplanes, power generators, heavy
equipment and nuclear reactors.
More than 30 transactions worth more than $20 billion to
American businesses are stuck awaiting assistance for their
buyers, in the so far vain hope that Senator Richard Shelby,
Republican of Alabama and once a bank supporter, will end his
power play and allow the agency to fully function.
In turn, giants like General Electric and Boeing are
shifting more operations and jobs abroad. Other nations'
export-credit agencies are ``rolling out the red carpet,''
said John G. Rice, the G.E. vice chairman.
Last June 30, the so-called Ex-Im Bank two blocks from the
White House closed its door to all new business after a
faction of conservative Republicans, denouncing ``corporate
welfare,'' blocked renewal of its charter.
In December, the bank's bipartisan supporters in Congress
secured the agency's reopening, only to watch Mr. Shelby play
what has proved to be a very strong hand. As chairman of the
Senate Banking Committee, he bottled up President Obama's
nomination of a third member for the bank's five-person
board. Only the board can approve transactions of more than
$10 million; without a quorum of three it cannot. The
resulting seven-month impasse reflects both the longstanding
power of a single senator to block action in that
institution, and the more recent ascendance in the Republican
Party of conservative populists--hostile to all things big,
business and government--over once-dominant pro-business
types.
``It's very troubling to me, and I think a lot of others,
that one person can hijack a process and keep the export
credit agency from functioning in the United States when two-
thirds of Congress support it,'' Mr. Rice said.
Two weeks ago, G.E. announced it would expand manufacturing
of gas turbines in France rather than Greenville, S.C., in
return for French export financing for sales in countries
including Saudi Arabia, Brazil and Mexico.
Last September, G.E. announced a flurry of moves: creating
up to 1,000 jobs in the Czech Republic to produce turboprop
aircraft engines; shifting 500 power-project jobs from Texas,
South Carolina, Maine and New York to France, Hungary and
China; promising 1,000 energy-sector jobs in Britain, whose
export bank will finance up to $12 billion in G.E. sales to
Brazil, Ghana, India and Mozambique; and relocating 350
engine manufacturing jobs from Waukesha, Wis., to a new
factory in Canada. ``Is it going to put G.E. out of business?
Absolutely not,'' Mr. Rice said. ``We can go to a plant in
France, or a plant in Switzerland and Germany.'' But, he
added, ``A lot of our suppliers can't come with us.''
Boeing is working with Britain's agency to finance airplane
purchases for unspecified customers, on the condition that
Boeing use Rolls-Royce engines. A company based in Bermuda
canceled a contract for satellites, a company in Singapore
declined Boeing's bids to sell satellites and Ethiopian
Airlines wrote the manufacturer that the lack of Ex-Im Bank
financing threatened ``our ability to purchase Boeing
aircraft in the future.''
Mr. Shelby was unavailable over several days to discuss the
issue, a spokeswoman said. She instead provided a statement
that the senator ``believes that his actions are in the best
interest of the American taxpayer.''
``Nearly 99 percent of all American exports are financed
without the Ex-Im Bank,'' it said, ``which demonstrates that
the bank is more about corporate welfare than advancing our
economy.'' The bank makes money, through proceeds from its
loans and insurance lines, but conservatives cite the risks
to taxpayers. The bank's chairman, Fred P. Hochberg, said he
had not talked with Mr. Shelby all year, adding, ``In
Washington, not returning a call is an art form.''
The Ex-Im Bank was created during the Depression as a
lender of last resort for exporters' foreign customers that
cannot get commercial loans. More than 60 countries followed
the United States' lead. China's export credit operation is
by far the largest.
By one measure, the lack of a quorum at the American bank
would not seem a problem. In recent years, about 98 percent
of applications for help have been for loans under $10
million. But in dollar terms, two-thirds of all assistance
has gone for deals exceeding that amount, mostly for
customers of big-item manufacturers like Boeing, G.E.,
Caterpillar, Westinghouse and John Deere.
The bank's backlog of 30 transactions does not even count a
multibillion-dollar deal for Westinghouse to build six
nuclear reactors in India that was announced this month by
President Obama and India's prime minister, Narendra Modi.
That, too, will need a functioning Ex-Im.
``We will certainly need a quorum at the bank for the
project's completion,'' said Courtney A. Boone, a
Westinghouse spokeswoman.
Especially in the developing world, some countries require
that exporters bidding for sales have backing from an export
credit agency. So some American companies are seeking or
accepting support from foreign agencies, which in turn
require bidders to create jobs in their countries. Boeing did
win a contract with VietJet for 100 American-made aircraft, a
deal announced during Mr. Obama's visit to Vietnam in May.
Financing will be arranged closer to delivery, leaving open
the question of whether the Ex-Im Bank will help.
Foreign carriers like VietJet ``continue to believe that
the United States wouldn't be so foolish as to dismantle its
Export-Import Bank,'' said Tim D. Neale, a Boeing spokesman.
``But the other issue is to what degree does this have a
chilling effect on ongoing sales campaigns for future
deliveries?'' Also in May, a Boeing official at its facility
in Alabama publicly criticized Mr. Shelby, saying he was
putting local jobs and suppliers at risk.
Mr. Shelby has stood firm, endearing him to conservative
anti-government groups crusading to close the bank--and known
to spend freely against politicians who cross them. Their
blessing was especially important to the senator as he faced
a conservative challenger in Alabama's March Republican
primary. Mr. Shelby suggested to colleagues and reporters
that he would let his committee act on the Ex-Im board
nominee afterward. ``He said, `I can't do this before the
primary,' '' said Senator Sherrod Brown of Ohio, the senior
Democrat on the banking committee. ``We took that to mean
he'd do it after he won his primary.''
Yet Mr. Shelby continues to block Senate confirmation of J.
Mark McWatters, formerly an aide to the Republican chairman
of the House banking committee.
Senate Democrats recently tried to force a Senate vote,
bypassing Mr. Shelby's committee, but they needed the
Senate's unanimous consent. Mr. Shelby objected, without
further word. ``This is old school politics, right?--`I'm the
chairman and I can decide,' '' said Senator Heidi Heitkamp,
Democrat of North Dakota.
She added, ``I don't go to bed worrying about the
executives at Boeing or G.E., because guess what? They have
options. The American worker doesn't have options.''

[[Page S4698]]

Ms. CANTWELL. The whole point of the export credit agency is to give
U.S. manufacturers the credit.
My point is that these products are agriculture based. If the Senator
from North Dakota could explain, these aren't agricultural
manufacturing products, but she is saying that there are also large-
scale U.S. manufacturing products out of agriculture that also are not
getting credit financing?
Ms. HEITKAMP. Absolutely, and if we don't move with haste, if we
don't supply on time, we won't get the business.
The PRESIDING OFFICER. The time of the Senator from North Dakota has
expired.
Ms. CANTWELL. Mr. President, do I have time reserved in the consent
agreement?
The PRESIDING OFFICER. The Senator from Washington has 10 minutes.
Ms. CANTWELL. I yield whatever time for our discussion to continue of
that 10 minutes.
The PRESIDING OFFICER. The Senator from North Dakota.
Ms. HEITKAMP. Why I think it is absolutely critically important to
make this point, not just about what we produce but who produces it, is
because at the end of the day, 95 percent of all potential consumers do
not live in this country, and America still remains the best and most
treasured producer of quality construction equipment in the world.
These are jobs that have helped my manufacturing sector that is
dependent on agriculture, which has huge challenges right now. If we
can't produce tractors that farmers are going to buy, we can produce
construction equipment that everyone can buy to build infrastructure in
their countries. There is a narrow view in this Congress, but 67
Senators voted to open up the Export-Import Bank and over 70 percent of
the House of Representatives said: This is nonsense; let's open up the
Export-Import Bank. Yet we are unable to do it because credit over $10
million cannot be moved forward without the approval of the Bank Board,
and the Bank Board cannot operate without a quorum. That is the bottom
line.
Ms. CANTWELL. Mr. President, I wish to ask the Senator from North
Dakota just one more question, because I want to make sure she
continues to make her point and I know we have a colleague waiting.
Aren't we here right now today to ask our colleagues that when we come
back after July 4 and we have 2 weeks, we dedicate ourselves to this?
It is not every day that the Senate can be involved in an activity
that creates so much economic value--$20 billion in job creation--but
we can get this done. So we are here asking our colleagues to step up
and help us resolve this issue in whatever way possible.
If someone doesn't want to let a nominee out of committee because
they made a promise to somebody, that is fine. Let's put language
somewhere in a product that is moving. We can look at the FAA bill. We
can look at anything. But to go home for the recess, all the way
through the month of August--leaving those farmers without economic
closure to a deal that has been inked, to a sale that has been made, to
jobs that are being created--because you won't let somebody have an
operating majority on a board seems like a very drastic step. Is that
why the Senator from North Dakota is here, to ask our colleagues to
step up to the plate and help us resolve this before the July recess?
Ms. HEITKAMP. I thank Senator Cantwell. That is why I am here. But I
am also here to ask my colleagues to be empathetic, to understand what
it would feel like if you were employed in a gas turbine business in
one of the Carolinas and that business went to France because we
couldn't figure out how to open up the Bank. How would you feel?
I think it is so important to not just reflect on our trade deficit
but on the imperative of building our manufacturing base and our export
base. If that is not enough of an economic argument, let's look at the
microargument. Let's look at what is happening to American families
because we aren't getting our job done here. So, as I said before, I
don't go to bed worrying about the executives at GE or Boeing because
they have options and they are exercising those options. Those options
include moving to Canada and France. The American worker is not going
to be moving to France to take those jobs. That American worker is
getting a pink slip, and that is wrong. That is wrong in so many ways.
So I thank Senator Cantwell for her steadfast and absolute commitment
to opening up the Bank. I think everybody should have a moment of
personal reflection, not just on the economics of this but on the
impact this is having on literally thousands of American families.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I want to share my concerns about the
Puerto Rico legislation we're considering.

I've been involved with this issue for quite a while now. This past
December I chaired a hearing in the Judiciary Committee to examine the
root cause of Puerto Rico's fiscal problems. At the hearing we learned
that even when Puerto Rico's economy took a downturn, government
spending did not.
Instead of making difficult decisions to cut spending and balance its
budget, the government kept borrowing to finance its operations, using
tax-exempt bonds to roll over debt. As a result, Puerto Rico now has
one of the largest government deficits in the United States, and debt
we're told isn't payable and must be restructured.
As many of you know, a wide array of investors own Puerto Rican
bonds, which are issued by roughly 17 different entities. According to
Bloomberg, Puerto Ricans themselves hold $20 billion of the debt.
Nearly 60 percent of Puerto Rico's debt is held largely in the
individual retirement accounts and 401(k)'s of regular folks throughout
the U.S. In fact, over 17,000 Iowans are invested in mutual funds
containing at least one type of Puerto Rican bonds.
These folks aren't vultures. They are middle-class taxpayers who
invested their hard-earned money into one of the many tax-exempt
municipal bond funds containing Puerto Rico's bonds.
Why should they be forced by Congress to bailout Puerto Rico's
government and pension obligations? The answer is they shouldn't, but
unfortunately, there is no guarantee that these hardworking folks'
investments, whether in Iowa or elsewhere, won't be haircut in order to
fund pension obligations or Christmas bonuses for public workers in
Puerto Rico.
This didn't have to be the case. At our December hearing I stated two
principles that have guided me as this issue has progressed.
First principle, any inclusion of debt restructuring or bankruptcy
should occur only at the end of the line, as a tool of last resort.
Otherwise the control board will face too great of a temptation to use
bankruptcy to balance the budget, as opposed to implementing all
available means to increase and collect revenues, while reducing
expenses within government.
Second principle, it would be a bad idea for Congress to permit
Puerto Rico to walk away from its constitutional debt obligations
through what some call an unprecedented super chapter 9 bankruptcy.
In fact, I received a letter from Governor Branstad of Iowa stating
that granting Puerto Rico such authority ``would set a dangerous
precedent and likely raise the borrowing costs for States and
municipalities across the nation, which would reduce our ability to
invest in vital services and erode investor confidence in the whole
notion of `full faith and credit' debt.''
Unfortunately, the House bill fails to meet the two principles I have
outlined above. First, the bill operates under the presumption that the
only way to balance the budget is to restructure debt.
This means that the oversight board will have more flexibility to
avoid making difficult fiscal reforms to balance the budget, because
the debt can simply be restructured.
In fact, one of the oversight board's first responsibilities is to
create a fiscal plan that ``provides adequate funding for public
pension systems'' and includes a ``debt sustainability analysis.''
Neither of these terms are defined. The oversight board may very well
read these terms as permitting full funding of pensions, while only
funding ``sustainable levels of debt service.''
Not surprisingly, this is exactly what the Obama administration seeks
to accomplish: protecting pensions at the

[[Page S4699]]

expense of other retirees. The effect this bill has for retirees in
Iowa and elsewhere is that they must place their trust in an oversight
board to act courageously and make hard decisions, lest they find
themselves bailing out Puerto Rico's government.
Second, no matter what the House bill calls it, title III's debt
restructuring authority, which allows for the restructuring of debt
that is issued or guaranteed by Puerto Rico, is super chapter 9.
Investors and the municipal bond market have treated Puerto Rico like
a State. Granting Puerto Rico the authority to restructure ``state-
like'' obligations will be viewed as precedent for giving a State
similar authority. Of course, no State is going to ask to be covered by
the House bill. Rather, they will say if a territory can receive
unprecedented authority from Congress, then why shouldn't a State?
Illinois is watching this issue very closely.
Moreover, by creating this new authority Congress has invited
material litigation risk.
Worst case, should the law be found unconstitutional under the
Takings Clause, then the Federal government would be liable for money
damages--the very definition of a bailout. And increased litigation
will cause uncertainty, which is the last thing needed in Puerto Rico,
making it impossible for Puerto Rico to access the capital market for
years.
If that occurs, then mark my words, sooner or later we'll be
considering whether to provide direct federal financial assistance to
Puerto Rico, despite the claims that this bill doesn't result in a
taxpayer bailout.
And given that Puerto Rico has failed to provide Congress with
accurate financial information regarding their fiscal crisis, this
unprecedented and risky authority appears both unnecessary and
unjustified.
Given the bill's failure to satisfy the two requirements I have laid
out, which unduly harm retirees in my State, and more importantly,
while also setting bad precedent, I can't support this bill.
Perhaps my concerns will be proven wrong and the bill will work
perfectly. But it's been my experience that bad facts make for bad law.
Unfortunately, I fear we are simply pushing this problem down the
road and have failed to address the root cause of Puerto Rico's fiscal
crisis at the expense of uncalled for risks and precedent.
Mr. President, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Gardner). The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. DAINES. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

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