Fix the Puerto Rico Spending Reform Bill
In Congress, a mistake in legislative langauge of a bill is referred to as a “scrivener’s error,” a mistake in the text that makes a portion of the law seem inconsistent with the intent of the lawmakers. That is, perhaps, the only explanation to sections of the Puerto Rico reform legislation that passed the House of Representatives that appear to give the new oversight board powers to reduce total debt amounts without an agreement of the island and their creditors.
Ignoring pleas of the Obama White House and their allies, Congress pushed forward with legislation that was designed to prevent Puerto Rico from declaring bankruptcy. Congressional leaders were concerned that allowing the island’s big spending politicians to walk away from their debt obligations would give state’s like Illinois a green-light to continue to run massive deficits knowing that sometime down the road, they could escape repayment.
Speaker Paul Ryan insisted that the legislation was neither a bailout or bankruptcy. Instead, Ryan offered a third way — the creation of a oversight board to make difficult spending cuts that the politicians aren’t brave enough to make. However, after the House passed the measure, language from the bill came to light that runs directly counter to Ryan’s claims.
Tucked in the bill is language that appears to give the new control board dictatorial powers to reduce debt amounts without agreement of either the creditors or the debtor. That is bankruptcy on steroids and certainly was not the intent of the legislation.
The Senate now takes up the bill. If the GOP remains true to their core principles, these sections will be amended to make clear that Congress did not intend to give Puerto Rico or an unelected control board the ability to walk away from debt obligations unilaterally.
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