WASHINGTON, DC – U.S. Senator Bob Menendez spoke on the Senate floor today in opposition to H.R. 5278, PROMESA. Below are his remarks as prepared for delivery:
“I rise to speak about the ongoing crisis affecting the 3.5 million American citizens in Puerto Rico and to comment on the legislation pending in the House.
“We are facing a critical moment in the history of Puerto Rico. The island is sinking under a mountain of debt. I’ve said it before but it bears repeating: Just servicing the government’s $72 billion debt swallows 36 percent of the island’s revenue. That means that for every dollar Puerto Rico takes in, they immediate send over a third off to bondholders. This is not sustainable for any government, especially one that has been mired in a decade long recession.
“Congress is faced with an immediate and serious choice. Indeed, the decisions we make in the next month will have profound consequences on the people of Puerto Rico for a generation. The stakes are so high, we simply have to get this right.
“I’ve said from the beginning that any fix needs to provide a clear path to restructuring, with an oversight board that represents the people of Puerto Rico and respects their democratic rights. And, if we truly want to help the economic situation on the island, we also need to provide parity for healthcare funds and worker tax credits that all 3.5 million American citizens living in Puerto Rico have access to once they move to the mainland.
“Now, I must say I’ve been encouraged by Speaker Ryan and Chairman Bishop’s acknowledgment that Congress needs to act to prevent this fiscal crisis from becoming a full blown humanitarian catastrophe. But unfortunately, the legislation that is being marked up tomorrow falls short on several fronts.
“Instead of offering a clear path to restructuring, the legislation creates a number of obstacles that could derail the island’s attempts to achieve sustainable debt payments. Most striking, it requires a 5 to 2, supermajority vote by the control board to access this necessary restructuring authority.
“While most reasonable people agree it’s absolutely vital for Puerto Rico to be able to restructure its debt, this authority can be blocked by a simple minority of the board. And without the authority to restructure its debt, this legislation does virtually nothing to help Puerto Rico to dig out of the hole they’re in.
“Exacerbating this concern is the composition and scope of power endowed to the control board. The fact that the Puerto Rican people will have absolutely no say over who is appointed or what action they decide to take is blatant neocolonialism.
“And while there is some fancy language to pretend that the President will get to pick the board members, this is all a fig leaf to hide the real levers of power. The board will be composed of 4 Republican appointees and 3 Democrat appointees, and in addition to being the gatekeeper to restructuring, it will have the power to veto laws and regulations, override budgets, and determine the level of debt payments.
“To me, it’s simply wrong and un-American to take away the basic and fundamental democratic rights of the people of Puerto Rico.
“This bill also puts speculating hedge funds above pensioners, including language to ensure that in any restructuring deal puts the people who worked their entire lives to help the island at the back of the line behind Wall Street. I’ll remind my colleagues that each and every Puerto Rican is an American citizen, many of whom have fought and died for our country in every war over the past century. They deserve the same rights and respect as citizens in New Jersey, Wisconsin, Utah or any other state in the nation.
“Finally, the proposed legislation senselessly cuts minimum wage rules and new overtime protections that would apply to workers in Puerto Rico. At a time when cities and States across this nation are moving towards increasing the minimum wage, I cannot fathom why anyone would support decreasing it for Puerto Rico.
“With a poverty rate of approximately 45%, lowering people’s wages is not a pro-growth strategy, as some have called it; it’s a pro-migration strategy. These unrelated riders are counterproductive and will only drive more Puerto Rican residents to migrate to the mainland, where they won’t have to work for sub-minimum wages.
“Mr. President, as it currently stands, I’m afraid this bill provides little more than a Band-Aid on a bullet hole with regard to Puerto Rico’s unsustainable debt. Mark my words—if we don’t seize this opportunity to address this crisis in a meaningful way, we’ll be right back here in a year from now picking up the pieces. So while it’s absolutely clear that we need to act and act decisively and expediently to help our fellow citizens in Puerto Rico, just as importantly, we need to get this right.
“Working together and helping each other in a time of need is what this country is all about. When a hurricane hits the Gulf Coast or a tornado ravages the Midwest, I don’t ask how many of my constituents in New Jersey were affected. Rather, I stand with my fellow Americans and fight to provide relief, regardless of what state or territory they’re from.
“Let’s continue to honor that timeless American tradition, let’s honor our country’s motto of E Pluribus Unum – “out of many… one” – and provide our fellow Americans in Puerto Rico with the tools they need to dig themselves out of this mess, without taking away their rights of self-governance.”