Home > issues > Page

PROMESA 

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

Click HERE to view the text of H.R. 5278.

Click HERE to view for more information.
Click HERE to view a section-by-section summary.
Click HERE to view the full amendment list. 


The PROMESA File

 What changed in H.R. 4900 to make it H.R. 5278?
 
Click HERE to enlarge. 

Support

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

  • Douglas Holtz-Eakin, President - American Action Forum
  • National Taxpayers Union
    • "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)
  • Council for Citizens Against Government Waste
    •  "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)
    • Council for Citizens Against Government Waste
  • Americans for Tax Reform
    • "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)
    • Americans for Tax Reform
  • R Street
    • 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)
  • Asset Management Group of the Securities Industry and Financial Markets Association (SIFMA)
    • "[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 Speaker of the House Brian Bosma
    • 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)
  • Wisconsin State Senator Scott Fitzgerald
    • "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
  • National Association of Home Builders - Puerto Rico Chapter
    •  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)
    • National Association of Home Builders - Puerto Rico Chapter
  • Jubilee USA Network (6/8/16)
    • "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)
    • Jubilee USA Network (4/13/16)
  • National Association of Counties, National League of Cities, U.S. Conference of Mayors, Government Finance Officers Association, International City/County Management Association
    • "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)
  • Association of General Contractors of America - Puerto Rico Chapter
  • Association of General Contractors of America
    • "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)
  • Puerto Rico Hospital Association
    • "We believe you have made significant progress in developing workable solutions to the government of Puerto Rico's fiscal crisis." (6/1/16
  • National Retail Federation
    • "[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)
  • Private Sector Coalition of Puerto Rico
    • "[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)
  • National Review
    • "The imperative here should be to enact a law that reduces the likelihood of a bailout. The House Republican bill does that." (4/20/16)
  • Pacific Investment Management Co.
    • "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)
  • Janney Fixed Income Strategy
    • "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)
  • Tea Party Forward
    • "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."
  • United Church of Christ
  • Patriot Update - Dean Chambers
    • "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)
  • Ryan Ellis - Conservative Reform Network
    • "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)
  • Catholic Charities USA

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)”

Click HERE to read the discussion draft.

Recent Activity:

Show

Latest News

Bishop Statement on Nomination of Tara Sweeney to Be Assistant Secretary of Indian Affairs

Yesterday, President Donald Trump announced his intent to nominate Tara Sweeney to be Assistant Secretary of Indian Affairs within the Department of the Interior. Chairman Rob Bishop (R-UT) released t...... Read more

Chairmen Send Letters to FBI and FEMA Regarding Allegations of the Misappropriation of Hurricane Aid in Puerto Rico

Today, Chairman Rob Bishop (R-UT) sent a letter to Federal Emergency Management Agency (FEMA) Administrator William B. “Brock” Long and Federal Bureau of Investigation (FBI) Director Christopher Wray ...... Read more

Onshore Energy Bill Draws Praise as Subcommitte Continues Broad Overhaul of Federal Lands Energy Policy

Today, the Subcommittee on Energy and Mineral Resources heard testimony on a discussion draft of the “Opportunities for the Nation and States to Harness Onshore Resources Act” or “ONSHORE Act.” The bi...... Read more

View All News

Calendar

Oversight Hearing on Empowering States in Sage Grouse Management
Full Committee | 1324 Longworth House Office Building Washington D.C. 20515
Legislative Hearing on Indian Lands Bill
Indian, Insular and Alaska Native Affairs | 1324 Longworth House Office Building Washington DC 20515
View All Events