Progressives Still Don’t Like The Puerto Rico Bill

Huffington Post

Progressives Still Don’t

Like The Puerto Rico Bill

By Laura Lopez & Daniel Marans

The House is set to move on Republican-crafted legislation next week that would give Puerto Rico powers to restructure its crippling debt. After one failed markup and three drafts, the hard part should be over.

Or not. While Democratic leaders appear ready to support the revised bill, a number of progressives and unions representing workers on the island are concerned about the new text.

Namely, some lawmakers are wary of the bill because it creates a seven-person financial oversight board authorized to help the commonwealth restructure its $70 billion in unpayable debt and draft an economic recovery plan.

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Eric LeCompte, executive director of Jubilee USA, a religious anti-poverty group and proponent of restructuring Puerto Rico’s debt, endorsed the bill while acknowledging it is not “perfect.”

LeCompte argued that even the threat of court-supervised restructuring would create an incentive for parties to reach a voluntary agreement to put Puerto Rico’s debt on a sustainable path.

The bill contains other provisions that give Puerto Rico’s government more leverage over creditors, LeCompte said. He described an “innovative” clause that would require all creditors in a given bond pool to proceed with a voluntary restructuring deal if the lenders holding two-thirds of that pool’s bonds agreed to it.

This would prevent a small number of holdouts from blocking a resolution, he said — something that was a problem in Argentina and other countries plagued by sovereign debt crises.

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