Tuesday, 18 Dec 2018

Democrats pledge to use the new majority of the House to investigate the Puerto Rico supervisory board

DOSSIER – In this archival photo of July 29, 2015, the Puerto Rican flag flies in front of the Capitol of Puerto Rico, as in San Juan, Puerto Rico. (AP Photo / Ricardo Arduengo, File) One of the main Democrats in the House pledges to investigate the budget commission to oversee Puerto Rico's debt crisis, saying its decision to cut government spending was violating its congressional mandate to help the economic recovery of the island. Rep. Raúl M. Grijalva (D-Ariz.), The new chairman of the House's Natural Resources Committee, said Thursday that he would use the committee's authority to review the council's alleged conflicts of interest. as well as its proposals for Puerto Rico to reimburse its creditors. The Financial Supervisory and Management Board, created by a 2016 law signed by former President Barack Obama, is pushing strong cuts in public spending in Puerto Rico to repay the $ 70 billion it owes to bondholders. The annual budget of the Puerto Rico General Fund is about $ 9 billion. Tight budgets have already forced Puerto Rico to cut city budgets, close about 300 schools and more than double tuition fees at its public universities as the economy approaches the 13th consecutive year of recession. Grijalva and other critics have criticized the tax office's plans as "austerity measures" that will only exacerbate Puerto Rico's economic malaise and incite residents to flee the island, while that Puerto Rico must repay its debts to encourage long-term investments. "The oversight committee, with some of the proposed cuts, has made the recovery worse and more difficult," said Grijalva, whose natural resources committee oversees Puerto Rico's business affairs. "It is our responsibility, as a committee – now largely constituted – to treat the citizens of Puerto Rico as equals."[[[[Puerto Rico after Maria: a year of disruption]Grijalva said he would press for the committee to travel to Puerto Rico and carry out an "investigative" mission on the board of directors and the economic stimulus, which could be followed by a meeting. supervision hearings. In a statement, a Finance Committee spokesman cited a letter sent last month to Democratic members of Congress, in which she reported projections that the Puerto Rico deficit would increase in the long run. "The Commonwealth needs to implement additional structural reforms and use short-term surpluses to manage these deficits in the long run," wrote José B. Carrión III, chairman of the board of directors. "This would allow the Commonwealth to achieve a balanced budget, improve the competitiveness of the island and increase the resources available to manage the long-term liabilities of the Commonwealth and, decisively , to reinvest in the people of Puerto Rico. " Carrion's letter also strongly denies that the council exacerbated Puerto Rico's economic difficulties, accusing the local government of its alleged refusal to implement the cuts proposed by the council. The question of how to restructure the Puerto Rico debt crisis has become an increasingly urgent issue as the island tries to recover from Hurricane Maria, which has killed thousands of people and caused about $ 43 billion in damages. Since the hurricane, the tax commission has increased its estimates of what Puerto Rico should pay to its bond creditors, since the US government has spent millions of dollars on the island to help it get off the ground. to rise from the storm, according to the letter of the Democrats. The Puerto Rican state government has quarreled with the duties of the board of directors, but has little recourse because it does not choose who it is. The White House selects the members of the board of directors from a list created by members of Congress, each party being able to choose its own list. Puerto Rico, a republic of the United States, has a delegate to Congress but this person does not have the right to vote. On Friday, Democratic lawmakers will also send a letter to the Finance Committee asking for full accounting of its proposals. Their momentum marks a turning point in the Democratic Party that no longer has the Obama administration's support for the board's policy of cutting social services to cure its financial injury. The letter, organized by the Congressional Progressive Caucus, was signed by three main candidates for the 2020 presidential nomination: Sense. Bernie Sanders (Italy), Elizabeth Warren (D-Ma.) And Kirsten Gillibrand (DN.Y.) – as well as more than two dozen Democrats in the House. "The Financial Control Council imposes massive austerity on people nobody has elected," said Federico de Jesús, director of the consulting firm FDJ Solutions, and former deputy director of the Puerto Rican governor's office in Puerto Rico. Washington. "House Democrats should investigate whether debt restructuring agreements are sustainable and can be settled without causing more harm than good." The economy of Puerto Rico has entered a stalemate that is not safe. It is never adjusted in the mid-2000s, thanks to a special tax credit. which had stimulated manufacturing on the island was eliminated. In 2015, the governor of Puerto Rico declared the island debt "not payable", but was prohibited from filing a Chapter 9 bankruptcy under federal law. In 2016, Congress passed Puerto Rico's Law on Control, Management and Economic Stability (known as "PROMESA"), which created the board of directors and charged it with the restructuring of Puerto Rico's debt. The latest negotiation proposed by the tax council would force Puerto Rico to Héctor R. Cordero-Guzmán, a professor at Baruch College of City University in New York, also worked at the Hunter College's Puerto Rican Studies Center. The governor of Puerto Rico has quarreled against the authority of the board of directors, the government having ignored some of his mandates, which has provoked battles in the courts. Puerto Rico's economy fell 8% in the year ending in June, according to the Wall Street Day. The unemployment rate remains more than three times higher than that of the United States. "Economic experts have warned that this approach could exacerbate the downward economic spiral and the population that has plagued Puerto Rico for more than a decade," writes the Democratic deputy. States. "We strongly urge you to adapt your current policy approach." The letter also calls for an "accounting and justification" of the council's budget for 2018 to 2023. In March, a federal judge responsible for the Puerto Rico bankruptcy case approved almost $ 50 million in legal fees for the board. Proskauer Rose has asked for $ 15.9 million and O'Melveny & Myers has asked for more than $ 16 million. The legal costs are borne by the residents of the island. "The amount the commission has paid for its lawyers is a scandal and Puerto Ricans are very angry," said Ramón Luis Nieves, a former state senator in Puerto Rico, who criticized the commission. "We know that they need a real lawyer, but the rates are outrageous." The letter also asks if members of the tax administration board have conflicting allegiances, noting that two of them have worked for Santander Bank, which has helped to secure the growing debts of Puerto Rico. This suggests the possibility that the same people who decide on the amount of repayment of the bondholders will benefit financially. Grijalva said he would use the authority of the committee, including possibly his subpoena powers, to investigate potential conflicts of interest in the finance council. .

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