Oh, Puerto Rico…You Beautiful Disaster!
If life was as simple as sitting on a beach under a palm tree with a margarita, that would be great. I suppose that’s what Jimmy Buffet meant by his wonderful melody, Margaritaville!
Sadly, life in Puerto Rico is not so peachy. In case you missed it, Puerto Rico is billions of dollars in debt and looking for a bailout. There are plenty of folks who want that to happen. Liberals in congress think that would be great. Puerto Rico is definitely, Too Big To Fail, right? The Hedge fund guys would really like to see the bankruptcy laws get tossed out so they don’t get killed in the impending doom that is Puerto Rico. Lastly, it turns out there are a whole bunch of Republicans just fine with throwing good money into the Caribbean wind to kick this can down the road!
Recently, House Republicans were presented a unique opportunity to push for free market reforms in the tiny piece of paradise that America is responsible for. There is a chance to demonstrate financial discipline by enacting a control board to help navigate the challenges facing Puerto Rico from the financial abyss. By the way, the control board is an accepted idea by both sides of the aisle.
Kudos to Rep. Rob Bishop (R-Utah) for showing leadership in bringing forth the first draft of this legislation. Unfortunately, it has been discovered that Section 206 of the bill, as written, is tantamount to bankruptcy – undermining the whole purpose of the legislation to begin with.
Section 206 allows the control board to unilaterally cut debt load amounts even if the government entity that accumulated the debt can pay! As written Puerto Rico is given bankruptcy restructuring even if they are capable of paying their bills. This is exactly what Obama’s cronies – Anita Dunn and Jim Millstein have been lobbying for.
Most on Capitol Hill believe the language was inserted into the bill at the advice of the Treasury Department – the same Treasury Department that was demanding bankruptcy protection for San Juan to begin with.
The Senate now has the legislation and should amend it to make it clear that Congress did not intend to let the big spenders escape their fiscal responsibilities. Conservatives should demand a clarification or a change to this provision of the bill. After all, they only supported the measure when the Leadership of the House ensured them that the reform bill was neither a bailout nor bankruptcy. Section 206 undermines those claims and raises questions of their credibility.
This is the kind of sneaky behavior that makes people hate congress.