Ryan, Pelosi Say Puerto Rico Bill Deal Doable, But Gaps Remain

Rep. Pelosi News Conference: Puerto Rico Bill, Budget
  • Republicans meet behind closed doors on Friday to discuss bill
  • Ryan must address Republican criticisms measure is a `bailout'

Speaker Paul Ryan and top House Democrat Nancy Pelosi said Thursday they expect to be able to work out their differences on a bill to help address Puerto Rico’s debt crisis, but Ryan’s bigger challenge may be getting enough fellow Republicans to go along with the plan.

Republicans acknowledge the island needs help from Congress to -- in Ryan’s words -- "bring order to the chaos" of a crisis over its $70 billion in debt, but many are skeptical of the draft issued by the House Natural Resources Committee. 

"Puerto Rico’s increasing fiscal problems are the result of mismanagement and unsustainable policies enacted by the local government and under no circumstance will I support a taxpayer funded bailout of Puerto Rico," Republican Representative Doug Lamborn of Colorado, a member of the Natural Resources panel, said Thursday in a statement.

Republicans say that the curbs Democrats want to place on bondholders and creditors are too drastic. At the same time, Democrats complain that the oversight that Republicans want to enforce on Puerto Rico in return for relief is too harsh.

"The Puerto Rican people want jobs and an economy that allows them to live on the island and thrive, but so far, all the Republican majority has offered is more colonial oversight, more austerity, and more misery," Democratic Representative Luis Gutierrez of Illinois said Thursday on the House floor.

Those positions were still playing out after the Natural Resources Committee unexpectedly cancelled a planned meeting Thursday to consider a draft bill, delaying action until next week at the earliest. The panel’s Republican chairman, Rob Bishop of Utah, indicated the measure didn’t have enough votes yet to reach the floor.

Several Gaps

Specific differences remain over the powers of a proposed federal oversight board, the processes for restructuring the territory’s debt, a timetable for when a moratorium on creditor lawsuits would expire, and efforts by Republicans to let Puerto Rico lower its minimum wage.

"I think we’re going to get there," Ryan said Thursday at a news conference. Pelosi said there is still hope this can get done by May 1, when the territory faces a $422 million debt payment, but “I don’t know if that is still possible."

The two leaders didn’t indicate how or when the legislative snags might be resolved. Republicans are scheduled to meet behind closed doors Friday morning for Bishop and Republican leaders to sell the plan to a skeptical caucus. 

Ryan summarized their overall pitch: "Our whole entire purpose of this is to prevent the taxpayer from getting involved and not having a taxpayer bailout."

The negotiations over the bill, which include U.S. Treasury officials, did not appear to make much progress on Thursday.

‘Serious Concerns’

Pelosi told reporters that Democrats still have "serious concerns," and that a "relatively new wrinkle" is that some lawmakers want creditors to have a vote on the control board about restructuring decisions.

"Maybe there’s a way to accommodate that, but that’s a significant challenge," she said. Bishop said Thursday he believed "there is middle ground on that particular issue."

Bishop added, "There may be some other tweaks we can do on that to make more people feel comfortable." He didn’t commit to hold a committee meeting next week to work on the bill, saying “it’s fluid right now.”

Disagreements also remain about the makeup and workings of the seven-member federal oversight board that would supervise the territory’s restructuring, budgeting and finances.

Antonio Weiss, counselor to the U.S. Treasury secretary, told the committee in a hearing Wednesday that the bill’s requirement of a super-majority vote on decisions, as Republicans want, is a problem. He said a minority of the board’s members should not have veto power. Pelosi said she believes fixes to such concerns are doable.

Legal Deadline

Lawmakers are also wrangling over how long creditors would be under a moratorium on legal action against Puerto Rico. 

Republicans are pushing to lift the moratorium in February 2017, but the administration and House Democrats say that is too soon -- allowing at best only six months for the oversight board and restructuring efforts to have been in place. In addition, the next Puerto Rico governor, who will be elected this fall, would have been in office only one month by that date.

Bishop insisted Thursday that the date would not be changed. "The stay is going to stay the way it is," he said.

Democrats Aligned

House Democrats and the administration, meanwhile, remain relatively aligned on their objectives.

For instance, the White House and Democrats, led by the top Democrat on the Natural Resources Committee, Raul Grijalva of Arizona, say one of their top priorities is opposing a provision that would lower the minimum wage.

"We remain concerned about unnecessary provisions in this bill, including those that undermine worker protections or transfer federal lands, which would only do further harm to an economy that has already suffered through a decade-long recession," Brandi Hoffine, a White House spokeswoman, said Thursday.

Republican Pressure

There is clearly still daylight between Ryan and some of his rank-and-file members over their claims that this bill represents a bailout for Puerto Rico.

Ryan continued to insist Thursday that the bill was not a taxpayer-funded bailout, even as outside groups continue to push that claim.

One group, the Center for Individual Freedom, has launched a national media campaign in opposition to the bill. The group, in a press release, calls it an unprecedented "Super Chapter 9" proposal "that amounts to a bailout of Puerto Rico on the backs of American savers and retirees."

According to Sunlight Foundation’s Political Ad Sleuth, the center -- a non-profit group exempt from donor-disclosure requirements -- has purchased at least $200,000 in ads in the Washington, D.C., market to target the Puerto Rico bill.

Pelosi complained Thursday that the the ads running against the bill "are not even factual." 

"We were on the path to doing this last year -- then the hedge funds weighed in," she added. On Wednesday, Weiss estimated that about a third of Puerto Rico’s debt was being held by hedge funds.

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