Georgia Senator David Perdue on Wednesday released the following statement after voting against Washington’s plan to assist the Commonwealth of Puerto Rico with its $72 billion debt:
“Through irresponsible fiscal policies, the Puerto Rican government has found itself in a very serious financial situation. The Commonwealth needs help tackling its debt situation, but this is not the best solution to solve Puerto Rico’s fiscal problems. The deal Congress negotiated with President Obama is merely a band-aid for a long-term fiscal illness. By giving Puerto Rico the ability to remove debt payment priorities guaranteed by its own Constitution, Congress is setting a dangerous new precedent that will make it even harder for the Commonwealth to access capital markets in the future. Furthermore, without structural changes that get at the failed fiscal policies that pushed Puerto Rico to this point, the Commonwealth will potentially find itself facing another unmanageable debt situation down the road. There was a better alternative that would have assisted Puerto Rico and ensured that structural changes were implemented to prevent future financial hardships. Unfortunately, in typical Washington fashion, these long-lasting solutions were ignored.”
Senator Lamar Alexander released the following statement on his vote in favor of the bipartisan plan to establish a path for Puerto Rico to avert financial disaster:
“This bill establishes fiscal discipline for Puerto Rico without a federal taxpayer bailout. A vote against the bill would have paved the way for a federal taxpayer bailout.”
Senator Bob Corker said, after voting for legislation to impose a financial oversight board on Puerto Rico while giving the U.S. territory the opportunity to restructure its debt, “By applying this conservative approach to Puerto Rico’s fiscal crisis now, we are protecting American taxpayers,” said Corker. “It is unfortunate the U.S. territory has made imprudent decisions, but I am pleased this legislation will put it on a path to financial stability and economic growth.”
On June 9, the U.S. House of Representatives passed the legislation by a vote of 297 to 127. The bill will now be sent to the president’s desk.
The legislation would establish a seven-member fiscal oversight board that would control Puerto Rico’s finances. The legislation would also establish a process to adjust Puerto Rico’s debts in federal court.
Puerto Rico has accumulated $70 billion in debt and is facing an approximately $2 billion debt payment due on July 1.