Republicans Demand Flint-Like Solution To Puerto Rico Debt
by Dave Johnson
Campaign for America's Future Blog, May 25, 2016
EXCERPT...
Republican Solution
After much negotiation (and interference from Wall Street hedge funds) Congress has put together a bill called the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) (“Promesa” is Spanish for “promise”).
The legislation sets up an oversight board to restructure Puerto Rico’s debt. The oversight board is empowered to restructure Puerto Rico’s debt, which can include requiring creditors to accept less than 100 percent of what they are owed. This board will not be subject to any Puerto Rican authority. PROMESA requires its decisions to be the interests of Puerto Rico’s creditors.
Puerto Rico has already been through rounds of austerity, cutting human services and laying off public workers, closing schools, increasing the sales tax, and other measures.
But the bill will require more of this. PROMESA lowers the current $7.25-an-hour minimum wage to $4.25 an hour for workers 25 years and younger. Puerto Rico will be exempt from the new overtime rule raising the salary above which people can be made to work more than 40 hours with no extra pay from $23,660 to $47,476. The bill specifically protects creditors before pensions. Measures like this force the people of Puerto Rico to become poorer.
David Dayen writes at Salon, in “Bernie says bail out Puerto Rico: Sanders details how the feds should rescue the territory as they did big banks,” explains:
The oversight board would be able to institute more cuts, supersede local laws, lower the island’s minimum wage, and as a last resort institute a court-approved debt restructuring, as long as it is “in the best interest of creditors.”
It’s hard to see this as anything but a colonization of Puerto Rico. Even supporters of the bill acknowledge that. They see it as the only opportunity for Puerto Rico to avoid disaster by obtaining the ability to restructure its debt, given the makeup of this Congress. Hillary Clinton, who expressed “serious concerns” about the plan, nonetheless said Friday, “we must move forward with the legislation.”
Sen. Bernie Sanders gave a speech on the subject, saying,
“In the midst of this massive human suffering, it is morally repugnant that billionaire hedge fund managers on Wall Street are demanding that Puerto Rico fire teachers, close schools, cut pensions, and abolish the minimum wage so that they can reap huge profits off the suffering and misery of the children and the people of Puerto Rico. We cannot allow that to happen”
Sanders called for hedge funds that hold Puerto Rico’s debt to take “a massive haircut,” meaning accept much less than 100 percent of the amounts. He also asked the Federal Reserve “to use its emergency authority under Section 13(3) of the Federal Reserve Act,” saying, “If the Federal Reserve could bail out Wall Street, it can help the 3.5 million American citizens in Puerto Rico improve its economy and lift its children out of poverty.”
CONTINUED...
http://www.commondreams.org/views/2016/05/25/republicans-demand-flint-solution-puerto-rico-debt
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