Chair Grijalva Leads Introduction of “Amendments to PROMESA Act” to Stabilize Puerto Rican Economy, Stop Austerity Cuts, Guarantee Services Funding
This press release has been updated from the original published version to include additional endorsing organizations and to correct a name.
Washington, D.C. – Chair Raúl M. Grijalva (D-Ariz.) today introduced the Amendments to PROMESA Act, which prioritizes funding for public health care, education, safety, pensions and the University of Puerto Rico, creates a publicly funded commission to audit Puerto Rico’s debt, and gives the Puerto Rican government the option to discharge unsecured debt if it deems the financial burden excessive to the people of the island. The bill is available online at https://bit.ly/3ebPXm4.
The bill – cosponsored by Reps. Nydia M. Velázquez (D-N.Y.), Alexandria Ocasio-Cortez (D-N.Y.), José E. Serrano (D-N.Y.) and Darren Soto (D-Fla.) – is endorsed by the Hispanic Federation, the Service Employees International Union, the United Auto Workers, the Power4PuertoRico coalition, the Puerto Rican Association of University Professors, the National Student Confederation, the Center for American Progress, and by Dr. Jorge Haddock, president of the University of Puerto Rico. It makes significant improvements to the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which became law in 2016.
Among other features, the bill:
- defines public health care, education, safety, and pensions as essential public services, which makes it much harder for the Financial Oversight and Management Board to cut funding;
- assigns federal funding for the operation of the Oversight Board, which reduces the burden on the Government of Puerto Rico;
- guarantees funding for the University of Puerto Rico, which enjoys wide public support and provides essential technical and scientific support to the entire island;
- audits the public debt, which is a priority for many on the island who want to know how their money has been spent;
- and gives the Puerto Rican government the option to discharge overly burdensome unsecured debt, among other policy priorities.
“The crushing fiscal austerity imposed by the original PROMESA law has failed to improve economic development or fix chronic poverty in Puerto Rico, so it’s time for a more people-focused approach,” Chair Grijalva said today. “Whatever your politics, we can all agree when a course of action isn’t working as intended, and PROMESA is not working for the people who need it most. This bill is the result of a year and a half of traveling to Puerto Rico and listening to the people there. It’s a first step in addressing the challenges PROMESA has brought to the surface, and I’m proud to introduce it with my colleagues today so we can start a conversation about a better future for the island.”
“With hurricanes, earthquakes, and now a pandemic, Puerto Rico has suffered enough,” Rep. Velázquez said. “I will continue to oppose austerity measures that put hedge funds and speculators’ profits ahead of the people of Puerto Rico. The legislation we are introducing today will bring some badly help to Puerto Rico through important reforms. It includes a bill I authored with Senator Warren that will let Puerto Rico write down much of its unsecured debt. With COVID-19 and the current crisis, it is more important than ever that we give the Island a way out from under suffocating debt. This bill also includes legislation I wrote that would ensure consultants working for the Fiscal Oversight Management Board follow the same disclosure requirements as apply on the mainland. Puerto Ricans should be confident that the Board’s bankruptcy advisors do not have their ‘thumb on the scale’ to favor certain debts where they have a self-interest. This bill offers that transparency. I am proud to join Chairman Grijalva in the introduction of this bill and look forward to working toward its enactment.”
“The Fiscal Oversight Board created by PROMESA has too often failed to protect the most important asset that Puerto Rico has – its people,” Rep. Serrano said. “This legislation will make much-needed reforms to PROMESA to guarantee funding for essential public services such as education, public safety, healthcare, and pensions; to create stricter accountability and transparency measures for the Oversight Board; and to allow Puerto Rico to discharge some of its unsecured financial obligations. With these reforms, we can help the 3.2 million American citizens living in Puerto Rico better address the myriad problems caused by the economic crisis, natural disasters, and the current pandemic. Congress can and should set the island on the path to a fairer and more just future. I’m proud to join my colleagues in introducing this legislation,”
“We conducted numerous hearings on the Island and in Washington, received extensive input from diverse groups from across the Puerto Rican community and now present long-overdue PROMESA reforms for the people,” Rep. Soto said. “After nearly four years of PROMESA Fiscal Board oversight, we have yet to see meaningful improvement to unemployment, poverty and debt. After Hurricanes Irma and Maria, multiple earthquakes and a COVID-19 outbreak, the economic situation is more dire than ever. These critical reforms restore greater sovereignty to our fellow Americans in Puerto Rico and their elected leaders, establish more focus on jobs and economic growth and protect essential funding for education, pensions, health care and public safety. As we move forward, it is absolutely critical that we act swiftly to support our Puerto Rican brothers and sisters. Let’s reform PROMESA now and bring prosperity back to the Island!”
“I am proud to join Chairman Grijalva and my colleagues today in introducing these long-awaited changes to PROMESA” Rep. Ocasio-Cortez said. “This is a step in the right direction. We must ensure essential services like health care, public education and pensions are protected for the most vulnerable communities. I am also pleased that there was an inclusion of a public auditing of the debt - we cannot let Wall Street capitalize on the pain and suffering of the island.”
At the beginning of the 116th Congress, Chair Grijalva led a congressional delegation to Puerto Rico in March 2019 with Reps. Velázquez, Soto, Ruben Gallego (D-Ariz.) and Jenniffer Gonzalez-Colón (R-P.R) to meet with community leaders and hear from Puerto Ricans hurt by years of failed budget cuts and punishing fiscal austerity imposed by PROMESA. As part of their #ListenToPuertoRico tour, the lawmakers gathered information on the Trump administration’s failure to help Puerto Rico recover from Hurricane Maria and Hurricane Irma and on the severe economic and social impacts of drastic budget cuts by the Oversight Board to essential public services.
In May 2019, Chair Grijalva held a full Committee hearing on PROMESA, where it became clear that extreme budget cuts are reducing Puerto Ricans’ quality of life. In September 2019, Chair Grijalva traveled to Puerto Rico for a second time to tour San Juan, Loíza, Guayama, Adjuntas, and Vieques to hold a series of meetings with local leaders to discuss the pace of reconstruction across the island and gather information from local government officials.
In October 2019, Chair Grijalva held two legislative hearings on a discussion draft of amendments to PROMESA. On day one, the Committee received testimony from witnesses from FOMB, the Puerto Rico Fiscal Agency and Financial Advisory Authority, and elected officials from Puerto Rico. On day two, the Committee heard from unions, non-profits, professors, economists, and scientists who agreed the core elements of what is now the Amendments to PROMESA Act are vital to the future of Puerto Rico.
Chair Grijalva has been a champion of Puerto Rico’s recovery and a vocal critic of President Trump’s negligence of the island, Republicans’ humanitarian blockade of the island, and Trump’s mismanagement of disaster recovery efforts. In February 2020, he was a leading voice in the fight to secure emergency earthquake funding for Puerto Rico following 12 earthquakes of greater than 5.0 magnitude.
Grijalva sent Committee staff to Puerto Rico on a fact-finding mission to survey earthquake damage and released a report in February 2020 that details their firsthand accounts. The report urged passage of H.R. 5687, which provides $4.67 billion in emergency aid to Puerto Rico.
Chair Grijalva recently called on President Trump to immediately release aid to Puerto Rico that Congress had appropriated after Hurricanes María and Irma – aid the Trump administration had refused to release. Trump’s decision to withhold federal disaster recovery funds following the hurricanes has earthquake recovery and financial reconstruction even more difficult than it would otherwise have been.
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