By NAN Business Editor
News Americas, WASHINGTON, D.C., Thurs. June 30, 2016: The U.S. Senate on Wednesday passed a bill aimed at helping US territory Puerto Rico address its mounting fiscal crisis and sent it to President Obama’s desk to be signed into law. Here are five things you should know about the Puerto Rico Oversight, Management, and Economic Stability Act, or PROMESA which aims to “establish an Oversight Board to assist the Government of Puerto Rico, including instrumentalities, in managing its public finances, and for other purposes.”
1: The bill, H. R. 5278, was passed two days before July 1, 2016 – when the U.S. territory is set to default on roughly $2 billion in debt payments. It was passed by the U.S. Senate on a 68-to-30 vote to allow for an orderly restructuring of the island’s $72 billion in bond debt while creating a new federally appointed fiscal oversight board. The legislation establishes a seven-member control board to oversee negotiations with creditors and the courts over reducing some debt. It does not provide any taxpayer funds to reduce that debt.
2: The PROMESA bill would require the territory to create a fiscal plan to bring the island back from it’s current financial situation and to provide “adequate” funds for public pensions, which the government has underfunded by more than $40 billion.
3: Democrats raised a host of objections to the bill, including over the anti-democratic nature of the oversight board, the relatively arcane restructuring process and a provision that could lower the minimum wage for young workers.
4: The seven member oversight board, to be appointed by President Obama from recommendations given by party leaders in both the House and Senate, is supposed to be in place by Sept. 1, 2016. It is expected to cost $370 million over five years. The non-partisan Congressional Budget Office, which issued that estimate, said that about $350 million of the total “would primarily cover fees of legal and financial consultants hired to restructure Puerto Rico’s debt.”
5: New York Mayor Bill de Blasio expressed disappointment last night that Senator Mitch McConnell did not allow amendments to strengthen the Puerto Rican health system or strike the $4.25 youth minimum wage.