As the Committee on Natural Resources continues its work on a plan to responsibly address Puerto Rico’s fiscal crisis, Speaker Ryan took to the airwaves on CBS This Morning to explain the issue to the American people:
"We are focused on Puerto Rico. . . . Here is what we are working on doing: Having a very important oversight board to work on debt restructuring and helping Puerto Rico get their fiscal house in order. Taxpayers will not be involved in this. There will be no taxpayer bailout of Puerto Rico. But we will give the tools that are necessary to bring order to this chaos in Puerto Rico so that they can have a smooth landing, so that they can put their fiscal house in order, and so that they have the necessary tools they need—which they need in law—to be able to restructure this paralyzing debt that they have. . . . and it will make them have to balance their budget."
Watch the full interview here. Last week, conservative groups rallied behind the bill, and this week, two national editorial boards joined the chorus for Congress to pass this legislation, which protects taxpayers from bailout
Wall Street Journal: “Legislation introduced by Rep. Sean Duffy and backed by Speaker Paul Ryan offers a political prophylactic . . . The bill creates a seven-member oversight board appointed by the President from the nominations of congressional leadership. One member would be required to live on the island. The board is modeled on the Washington D.C. control board that imposed discipline on the capital city in the 1990s. Puerto Rico’s watchmen could reject budgets, contracts and regulations that don’t comport with its fiscal plan. The board could also use its veto to impel economic and government reforms. The GOP should welcome this political supervision. . . .
“The options now are an orderly restructuring governed by U.S. law or a chaotic default dictated by the island’s politicians. . . . Congress will have to act eventually, and if too many Republicans wig out, Democrats will demand a weaker control board and more welfare spending as the price of support. Or Republicans can do nothing, watch Puerto Rico default and slide into a deep recession while Democrats exploit the issue.”
The New York Times editorial board made some good points regarding the fiscal dynamic in Puerto Rico and reiterated the fact that the House legislation protects American taxpayers.
New York Times: “[t]he federal government needs to give Puerto Rico a way to restructure its $72 billion debt and impose a financial control board to oversee decisions by local lawmakers. But the effort to pass legislation is facing stiff opposition from some . . . who have bought into false arguments made by hedge funds and other investors that this would amount to a federal bailout or that it could open the door to bankruptcy filings by state governments.
“Done right, legislation that would help Puerto Rico through its financial crisis would not cost the federal government any money. And allowing the island to restructure its debt would not mean that Congress would have to give states like Illinois that also owe a lot of money to investors the ability to do the same. If Congress does not act now, Puerto Rico’s financial crisis could drag on for years. The island’s government would have to cut more public services, and more of the island’s 3.5 million people would seek a better life on the mainland, which would further reduce tax revenue.”