In the midst of the dog days of summer and a rough-and-tumble presidential campaign, something remarkable happened in Washington. Republicans and Democrats came together in large majorities to avert an economic calamity in the United States. While you may not have seen the images of Puerto Rico’s fiscal crisis on the nightly news, three and a half million Americans on the Island are going through very difficult times. A bipartisan bill to put Puerto Rico’s finances back in order was signed into law this past week. This is a very big deal.
After decades of fiscal mismanagement and a global recession from which the island has never recovered, Puerto Rico’s economy is in shambles and on the verge of total collapse. Almost half of the island’s residents live below the poverty line, including nearly six in ten children. The unemployment rate is double the next hardest hit state. Families have been torn apart as younger workers flee the island in search of job opportunities on the mainland. Among them are doctors and teachers who are leaving in droves. The cash-strapped government has stopped paying vendors and public pensions upon which many Puerto Ricans depend for their retirement. It has been forced to shut down schools and medical services. And the Zika virus, which has spread to three-fourths of the island, remains a serious threat to the health of Puerto Rico’s newborns.
For years, the Puerto Rico government tried to institute a paradise of liberal policies by providing overly-generous welfare benefits, egregious government salaries, and a habit of borrowing money to pay for a growing debt instead of growing the economy. As a consequence, it entered a vicious cycle of debt. Unlike states, territories such as Puerto Rico do not have the legal tools to restructure its debt, until now.
House Republicans and Democrats at the Treasury Department began intense negotiations earlier this year on a rescue package for Puerto Rico. Some may have believed (with fair reason) that Washington was unable to come up with a fiscally responsible solution for Puerto Rico.
And the negotiations were not easy. As the sponsor of the bill, PROMESA, I was intimately involved in the process, and often times grew frustrated with misleading attack ads and unwavering cynicism from the bill’s skeptics. But at no point did I ever question whether we would be able to come together to solve the crisis. The issue is too important to succumb to partisan bickering. When a crisis hits home, it is the duty of the country’s leaders to govern responsibly in support of its citizens. That is exactly what we have done with this landmark legislation.
The road to economic recovery in Puerto Rico does not end with this bill. Much work lies ahead. In September, a congressional Task Force will release its preliminary recommendations to spur economic growth, job creation, and investment on the island. In the same bipartisan spirit that PROMESA was passed into law, I hope the task force will write a roadmap that can get the support of both Republicans and Democrats to assist the people of Puerto Rico in their economic recovery. If we can achieve that, I am convinced that we can come together to do the same for the entire country.
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