WASHINGTON – Sen. Bob Menendez, D-N.J., said on Thursday that he plans to offer amendments to a House bill designed to help Puerto Rico that would make the bill fairer to Puerto Rican residents.
Menendez made his comments during a speech on the Senate floor.
He has been a vocal opponent of the bill, called PROMESA, which passed the House last week by a vote of 297 to 127. The bill seeks to balance competing interests by creating a strong, seven-member oversight board that would have the power to require balanced budgets and fiscal plans, as well as to file debt restructuring petitions on behalf of the commonwealth and its entities in a federal district court as a last resort if voluntary negotiations do not succeed.
Puerto Rico is currently struggling with about $70 billion of debt and $46 billion of unfunded pension liabilities. It also has a $1.9 billion debt payment due on July 1 that the commonwealth's governor has said cannot be paid.
"We have a chance to improve this bill and strike the right balance," Menendez said. "I want the opportunity to offer a number of commonsense amendments [to] temper the powers of the control board and give the people of Puerto Rico more of a say in who's on the board that will control them for quite some time."
Under the current version of the bill, the president and leaders of Congress would be tasked with naming the seven members, only one of which would have to have a primary residence or place of work on the island.
"The fact that the Puerto Rican people will have absolutely no say [in who is on the board] … is blatant neocolonialism," Menendez said.
The senator also noted the Congressional Budget Office, after its analysis of the legislation, said the board would have broad sovereign powers to effectively overrule decisions by Puerto Rico's legislature, governor and other public authorities. It also could implement its own recommendations for the island and veto other Puerto Rico laws that it deems in conflict with an established fiscal plan or budget for the commonwealth.
"[The board] combines the legislative powers [of Congress] with the veto powers of the executive to form … an omnipotent entity, the powers of which are virtually unprecedented," Menendez said.
The bill's treatment of restructuring, requiring five of the seven board members to vote in favor of it before it can proceed, is also an area where the bill "falls short" and "could derail the island's attempt to achieve sustainable debt payments," the senator said.
As an alternative, Menendez reiterated his stance that Puerto Rico needs "a clear path to restructuring under the bankruptcy laws." However, many of his Republican colleagues in Congress have expressed concern that a bankruptcy solution resembles a bailout and would create an opportunity for financially troubled states to lobby for the same treatment.
Menendez said during his speech that restructuring is not a bailout but is instead about taking the debt that Puerto Rico has and giving the commonwealth "the wherewithal to have it restructured."
One final point of contention he lodged was with a clause in the bill that would allow Puerto Rico's governor to approve a temporary measure that would allow employers to pay employees who are under 25 years old $4.25 per hour instead of the federal minimum wage of $7.25.
"At a time when we're working to increase workers' wages … PROMESA goes the opposite direction and it actually cuts workers' wages," Menendez said. "It amazes me that the solution to get Puerto Rico's economy going against is to ensure workers make even less money. Lowering people's wages is not a pro-growth strategy, it is a pro-migration strategy."
He concluded his speech by saying he hopes for the bill to be called to the Senate floor quickly and "at the very least" be subjected to "a thoughtful and thorough debate on the Senate floor."
Senate Majority Leader Mitch McConnell, R-Ky., told reporters on Tuesday that the Senate would take the bill up at some point before July.
