- After closed-door meeting, timing for next steps is unclear
- Republican leaders made case that measure will prevent bailout
House Natural Resources Chairman Rob Bishop said Friday there will be “modest” tweaks to a draft bill aimed at addressing Puerto Rico’s debt crisis, but said the timing for advancing the measure remains unclear.
Republican backers and detractors of the measure emerged from a closed-door meeting agreeing that depictions of the measure as a taxpayer bailout of the island are false, but sharp disagreements remain over several aspects of the bill. Those areas include how to design any forced restructuring of creditor debt, particularly the question of which classes of bondholders would get paid first.
Even so, Bishop insisted that any additional changes would be relatively minor. “The bill is not going to change substantially,” he said.
With some details still to be ironed out -- and uncertainty over whether Democrats are going to embrace the bill -- many Republicans said they remain unsold on supporting the proposed measure.
“I’m really waiting for the final text to do that,” said Representative Mark Meadows of North Carolina, as he walked out of the meeting.
The conservative House Freedom Caucus, which has often clashed with Republican leaders on fiscal issues, will meet Monday to determine its position on Puerto Rico, Meadows and Republican Representative Scott Garrett said Friday.
Republican leaders insisted they were making progress on selling the bill to their caucus.
Majority Leader Kevin McCarthy left the meeting saying, “I think we are getting closer.”
But senior members on the Natural Resources Committee would not say when, exactly, a new draft of the bill will be finished. One version was suddenly pulled from a planned markup Thursday because of a lack of support.
Democrats see progress being made on the measure, a senior Democratic aide said Friday, but they doubt that committee action will occur next week. Democrats and the White House remain concerned that some provisions are too harsh on Puerto Rico, and they’re also opposed to language that would lower the island’s minimum wage.
“There’s no reason we should let longstanding political disagreement about the minimum wage” affect Puerto Rico’s ability to pay its bills, White House Press Secretary Josh Earnest told reporters on Friday.
Several Republicans said it’s becoming clear that the Senate won’t pass a bill that clears the House without Democratic backing.
“It’s a complicated issue that people want to understand, and there’s a lot of questions and a lot of misinformation out there,” said Representative Sean Duffy of Wisconsin, the main sponsor of the bill, H.R. 4900.
Duffy said he believed that leaders have adequately debunked assertions in television some outside groups’ attack ads that the measure is a “bailout.” He said that the bill does not include any taxpayer liability -- “no money that goes to the Puerto Rican debt.”
But disputes remain over crucial details, including how the proposed financial oversight board would work, how restructuring of the island’s debt would be carried out, and what would happen on the island if Congress does not act.
One of the bill’s detractors, Representative John Fleming of Louisiana, said after the meeting that while the bill may not be a bailout of Puerto Rico, “I’m saying it could be the first step toward that.”
“There’s nothing in this bill that prevents a bailout,” added Fleming, a member of the Natural Resources Committee, explaining that he believes it does not go far enough to address the causes of Puerto Rico’s debt problems
Representative Doug Lamborn of Colorado, another committee member, said there are serious questions about how decisions would be made under the bill to prioritize payments to various classes of creditors in any so-called cram-down procedure to forcefully restructure the debt.
Representative Trent Franks of Arizona said he questioned “the gall” of Congress setting up a supervisory board to oversee Puerto Rico’s debt restructuring when the U.S. is itself facing a $19 trillion federal debt.
Now or Later
Duffy said he, Bishop and Speaker Paul Ryan made the case during the meeting that “this is an opportunity to put Puerto Rico on the road to prosperity.”
Republican leaders also told members that rather than being a bailout, the bill is actually a measure aimed at preventing one.
“Deal with it now, or deal with it later,” said Representative Fred Upton of Michigan, reciting a line from an old oil-filter commercial, of the argument for helping the island with its $70 billion debt crisis. Upton is chairman of the House Energy and Commerce Committee.
One important bellwether of Republican support suggests that sentiment may be shifting. Republican Study Committee Chairman Bill Flores of Texas said after the meeting that he believed the bill’s authors were making progress in needed improvements. The RSC is a bloc of about 170 House conservatives, and Flores had sharply criticized an earlier version of the draft bill.