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PROMESA’s Progress for Taxpayers

by Pete Sepp / /

Dear Chairman Sessions, Ranking Member Slaughter, and Members of the Committee:

On behalf of National Taxpayers Union’s (NTU’s) members in Puerto Rico and across the rest of the United States, I write to offer our support for the pro-taxpayer features in the recently reported version of H.R. 5278, the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), as well as offer views on desirable floor amendments.

The process that led to this point in PROMESA’s evolution has been arduous. NTU has great admiration for House Leadership and Members of the Natural Resources Committee, who have managed to balance many, often clashing perspectives on resolving Puerto Rico’s chronic financial difficulties.

In our opinion, H.R. 5278, as reported, has many elements worth supporting and reflects several improvements that have strengthened the bill. These include: a better-structured oversight entity with more robust capabilities to restore fiscally responsible policies; stronger protections against bailouts employing the full faith and credit of the United States; a less lopsided balance between creditors’ rights and debtors’ prerogatives in restructuring negotiations; and, a greater recognition, through legislative provisions for a commission, of the imperative to restore sustainable economic growth to the Commonwealth.

Now the time has come for the Rules Committee to provide structure for floor debate on H.R. 5278, and a number of amendments have been offered for your consideration. Although a rule could be crafted to accommodate floor time for dozens of amendments, we understand and acknowledge that this is highly unlikely. Therefore, from NTU’s standpoint, the following amendments deserve priority for being made in order:

  • Amendment #2 (Barr), clarifying that federal resources cannot be employed toward covering the obligations of financially troubled states, localities, or territories;

  • Amendment #6 (Issa), strengthening the voting requirement for a consensus among outstanding bond pools in the case of a Qualifying Modification;  

  • Amendment #9 (Sanford), providing straightforward authority and autonomy to Puerto Rico’s government in deciding how the federal minimum wage will apply;

  • Amendment # 13 (Fleming), stipulating that the oversight entity should respect the lawful priority of creditors in any debt restructuring scenario; and

  • Amendment #25 (Palmer), exempting Puerto Rico from Jones Act shipping restrictions.

For roughly a year, NTU has respectfully offered recommendations for a legislative response to Puerto Rico’s finances. Many Puerto Rico-related documents appear on our website at ntu.org, including those herehere, and here. I would therefore be pleased to answer any inquiries you may have on these or other amendments now before you. To reiterate our message from previous communications, we support the Speaker’s call for the House to arrive at a bill that can pass and be sent to the Senate in short order. Roll call floor votes on the above amendments would be heavily weighted as pro-taxpayer votes in NTU Rates Congress, and would affect the weight issued for final passage of H.R. 5278.

Sincerely,


Pete Sepp
President