Statement on Chairman Bob Goodlatte’s Trip to Puerto Rico
It was good to see House Judiciary Committee Chairman Bob Goodlatte, R-VA, taking some time this past weekend to learn first-hand about Puerto Rico’s financial incompetence. We can only hope his non-committal to pressing ahead with a Chapter 9 bailout is a sign he understands the inappropriateness of this as a policy solution for Puerto Rico’s ills.
Backers of the bill (H.R. 870), including Resident Commission Pedro Pierluisi and Gov. Alejandro Garcia Padilla, both Democrats, have asserted that bankruptcy protection is the only way to address the Island’s debts even though Chapter 9 applies to a fraction – $24 billion – of the Island’s whopping $73 billion debt.
It is also worth noting that Goodlatte’s trip came at a time when Puerto Rico is seeking to raise $3 billion in new debt from Wall Street – debt financed through new taxes on unsuspecting Puerto Ricans, and the savings of American retirees and pensioners. This raises troubling questions, and it looks like Puerto Rico is biting the hand that feeds it, and doing so without making any serious attempt to reform their failed ways.
There’s a better way forward: Puerto Rico should negotiate with creditors and commit to serious reforms that will allow the Island’s public corporations and central government to get back on solid footing and be run with competence and accountability in the years to come. A bailout would involve shredding commitments to investors, including American (and Puerto Rican) seniors and pensioners looking forward to retirement, and putting taxpayers on the hook for Puerto Rico’s past mistakes.
We trust this distinction became clearer to Chairman Goodlatte after visiting the Island. As Members of Congress continue to learn more and analyze the bailout bill, let’s hope they will redirect their efforts to finding a better solution.