April 14, 2016
US House of Representatives
Washington, D.C. 20515
On behalf of the more than 650 national religious organizations and local congregations that form Jubilee USA Network, we'd like to share our thoughts on HR 4900 or the “Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).”
We are grateful for the leadership of Speaker Ryan, Chairman Bishop and Representative Duffy. We are heartened to see cooperation among leadership of both parties and the White House to move a solution forward.
As you know, our religious partners in Puerto Rico are on the front lines of a growing humanitarian crisis. We echo their calls for solutions to be reached that respect the rights and dignity of Puerto Rico's people, government and creditors.
We believe that any solutions Congress moves forward should promote budget transparency, reduce child poverty and ensure strong provisions to restructure the debt in a manner that is timely, comprehensive and orderly.
Fundamentally we believe there can be no economic growth until the debt is brought back to sustainable and payable levels. Economic growth is essential to ensure that restructured debt becomes profitable in the future.
We believe legislation has made positive, forward progress on key elements and, while not perfect, we believe there are several improvements that will provide consensus for bill passage.
1.) While we support tools for restructuring, we are concerned that the collective action clause in Title VI creates the possibility Puerto Rico will not be able to enter restructuring by the time the stay expires in February. Under the current proposal Puerto Rico would have to complete voluntary negotiations with all its creditors before it can enter the restructuring phase. There is the risk that Puerto Rico would not have the time to complete negotiations and further deepen the crisis. The stay should be lengthened to 18 months from the date of enactment.
2.) A supermajority vote of the Oversight Board should not be required to authorize a restructuring. A simple majority is sufficient.
3.) Failures in public budget transparency are part of why we have this problem. The legislation should be strengthened by adding back a section that directs the Oversight Board to publish a list of Puerto Rico's creditors. A previous discussion draft had such a provision; it should be returned.
4.) It is important that local democracy be respected. Puerto Rico's people must determine their own destiny, have the ability to hold their leaders accountable and participate in public budget transparency efforts. Specifically, in terms of any oversight board, legislation should mandate that at least half of appointments be reserved for residents of Puerto Rico. Further at least one of President Obama's appointments should be chosen from a pool provided by the Government of Puerto Rico.
5.) The oversight board should be directed to make specific recommendations to the government of Puerto Rico and set obtainable goals that would lower the number of children living in poverty. Programs that seek to alleviate child poverty should be clearly identified as a "critical project" as defined in section 205.
6.) Puerto Rico will not tax their way or cut their way out of this crisis or see any economic growth. Eliminate the provision that reduces overtime and the minimum wage. Instead, a locally managed Earned Income Tax Credit would help stimulate the economy and support working families.
Faith communities across the United States and Puerto Rico are praying for you as solutions move forward.