On June 30, 2016, the "Puerto Rico Oversight, Management, and Economic Stability Act" (PROMESA) was signed into law by President Obama. The measure was passed by the Senate on June 29, 2016 and the House of Representatives on June 9, 2016.
Co-sponsors: Chairman Rob Bishop and Rep. Jim Sensenbrenner
Marc Joffe, Principal Consultant at Public Sector Credit Solutions and former Senior Director at Moody’s Analytics:
"[W]hen it comes to opposing PROMESA, the cause is dubious at best. As the bill comes to the floor, conservatives should ask themselves whether there is a principle worth fighting for, or whether special interests have fooled them into defending cronyism." (6/2/16)
"[I]f PROMESA is faithful to the Constitution, doesn't cost the taxpayer's money and won't disrupt the municipal bond market in the fifty states, exactly what conservative principle is violated by this measure?" (6/2/16)
"Those who came to Washington to offer a principled defense of the public purse and the Constitution should not be misled… Conservative Republicans should get behind PROMESA when it reaches the house floor." (6/2/16)
Simon Johnson, MIT professor and former chief economist at the International Monetary Fund, and Mark A. Cymrot, international arbitration litigator:
"If opponents succeed in killing the bill — or even just delaying it for a couple of months — it’s not only the 3.5 million U.S. citizens living in Puerto Rico who will be hurt. The ensuing void and uncertainty would also mean that most of Puerto Rico’s creditors will suffer as well." (5/24/16)
"The newly proposed legislation would establish a more orderly process. Public finance in Puerto Rico would remain in the hands of elected officials but now subject to strict scrutiny by an independent oversight board..." (5/24/16)
"Puerto Rico’s residents and most bondholders really need the same simple thing: economic growth. That will come quickest if a version of the proposed bill becomes law. But if a small group of creditors succeeds in blocking its passage, the negative consequences for Puerto Rico — and most bondholders — will be felt for years to come." (5/24/16)
Douglas Holtz-Eakin, former Chief Economist of the President’s Council of Economic Advisers and former Director of the Congressional Budget Office:
"If Congress does not act soon, the problems will get worse and may ultimately require a large infusion of taxpayer money." (5/9/16)
"Fortunately, the House of Representatives is beginning to consider a bill that addresses these…problems. It has ways to reduce the debt burden that respect the order of creditors…" (5/9/16)
"It has a strong control board to rationalize the budget and bring revenues and spending into line, and it has pro-growth measures to help the economy prosper. It’s not a bailout..." (5/9/16)
"We continue to have great admiration for the work of the Committee as well as Leadership in fashioning legislation that attempts to accommodate a variety of perspectives. This process has already significantly improved PROMESA’s potential for success, as well as its ability to protect taxpayers."(5/24/16)
"PROMESA is not a bailout, despite misleading advertisements to the contrary. Indeed, without the enactment of H.R. 5278, taxpayers will inevitably be forced to bailout Puerto Rico in the near future. The legislation will also help the citizens of Puerto Rico prosper from a growing economy." (5/19/16)
"The bottom line is that PROMESA addresses the Puerto Rico debt crisis in a responsible, pro-taxpayer way by avoiding a federal bailout, ensuring property rights are protected, and forcing San Juan to get its fiscal house back in order. Members of Congress should have no hesitation supporting this important legislation." (5/19/16)
This “assistance” (read, “supervision”) is needed intensely. If all goes well, the House Natural Resources Committee will report the bill out promptly and it will proceed to enactment." (5/19/16)
"[T]he combination of the establishment of a federal oversight board and a restructuring framework that is based on the Territorial Clause of the U.S. Constitution, will create a comprehensive solution to aid Puerto Rico’s economic recovery, improve the island’s financial position, and prevent Puerto Rico’s situation from leading to higher permanent borrowing costs for other municipal issuers." (4/21/16)
Indiana had to roll up its sleeves and make tough decisions to get its fiscal house in order. I strongly believe that PROMESA will put Puerto Rico in a position to do the same." (5/27/16)
"I write today to applaud you, Congressman Duffy, and Congressman Sensenbrenner for their leadership on HR 5278, the Puerto Rico Oversight, Management, and Economic Stability Act. As the Wisconsin Senate Majority Leader, committed to sound fiscal policy, I believe the bedrock of any solution should be restoring responsible fiscal management and economic policy that restores growth in the Commonwealth and does so with no federal dollars for a bailout." (5/31/16)
Congress should pass this Puerto Rico debt legislation as soon as possible. There can be no economic growth in Puerto Rico until the debt is restructured. Without a negotiated solution to the crisis, this legislation provides tools that can help get the debt back to payable levels." (5/25/16)
"Congress should pass this Puerto Rico debt legislation as soon as possible. There can be no economic growth in Puerto Rico until the debt is restructured. Without a negotiated solution to the crisis, this legislation provides tools that can help get the debt back to payable levels." (5/19/16)
"We support legislative efforts tailored specifically to Puerto Rico that will establish an orderly process to immediately initiate steps to restore fiscal order to the island and maintain critical services to the citizens of Puerto Rico." (4/14/16)
"We are confident that with the help of the U.S. Congress and the guidelines established under PROMESA Puerto Rico will be able to shine again, recover much of its fiscal health and goodwill, reenter the financial markets, and reignite much needed economic activity." (5/25/16)
"PROMESA delivers Puerto Rico the critical tools necessary to grow out of this crisis and head down the path to economic recovery, stability and growth." (5/25/16)
"[T]his important legislation would restore much needed economic stability on the Island and enable businesses to flourish…H.R. 5278 would establish an orderly process for the Island to address its debts and provide the tools and oversight necessary to ensure long-term fiscal responsibility." (5/25/16)
"[P]rompt passage by the House of Representatives of the PROMESA legislation is vital to restoring a level of confidence needed to give business and families a level of confidence in the future and provide them the comfort to move forward on their plans to continue to be part of the fabric of our special community in Puerto Rico." (6/1/16)
"PROMESA represents a responsible framework for managing the unavoidable restructuring of Puerto Rico’s debt and other liabilities. We expect no contagion to the broader municipal market from PROMESA. More specifically, PROMESA will not trigger higher borrowing costs for states or municipalities." (4/26/16)
"We believe stakeholders (bondholders, residents, pensioners, PR government, US government) will be best served by the orderly process which Congressional action could provide, rather than the chaotic scramble that could ensue once the litigation battle begins." (4/28/16)
"PROMESA is the most responsible pathway forward for our struggling territory of Puerto Rico. This bill will allow for the restructuring of Puerto Rico's debts, while also promoting budget discipline imposed by a federal oversight—a federally-created and named fiscal control board. Most importantly, the Congressman's bill will promote a private-sector driven solution, as opposed to generously using taxpayer’s money for a bailout."
"This legislation is a good fiscally conservative, and pro-reform approach, to addressing the debt crisis in Puerto Rico. Anyone who represents the taxpayers of the U.S. and supports good strong fiscally conservative legislation should support Congress enacting, and the president signing into law, the PROMESA bill." (5/19/16)
"In many ways, the bill is a big win for limited government conservatives. It has no taxpayer bailout of Puerto Rico–not a single dime of taxpayer money is sent down there. Rather, Puerto Rico will have to work their own way out of $72 billion in debt and defaults." (5/24/16)
Updated as of April 12, 2016: H.R. 4900 (Rep. Sean Duffy), To establish an Oversight Board to assist the Government of Puerto Rico, including instrumentalities, in managing its public finances, and for other purposes. ‘‘Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA)”
