Congress's Promise to Puerto Rico

A new bill to stave off economic collapse in the commonwealth finally might make it through disagreements on Capitol Hill, but sparks a new debate of its own.

Alvin Baez / Reuters

Late Wednesday evening, the House Committee on Natural Resources introduced a revision of the PROMESA Act (Puerto Rico Oversight, Management, and Economic Stability Act), the latest version of a bill designed to help give Puerto Rico the tools to address its economic crisis and looming humanitarian disaster. The bill will finally give the commonwealth the tools to restructure its debts and will include no taxpayer money for a bailout. After weeks of false starts and failed deals, it appears that there is a good chance of PROMESA finally passing the House and Senate, an important action that Treasury Secretary Jacob Lew has lauded as critical before Puerto Rico’s $2 billion July debt payments. Beyond immediate relief, PROMESA has important implications, not only for Puerto Rico’s future but for life on the mainland as well.

The bill’s final shape hasn’t been altered much from early drafts. PROMESA will allow for the creation of an independent oversight board, one with the power to restructure Puerto Rico’s debts. The board would be appointed by President Obama, who would chose from congressionally approved lists for all but one of the board slots or face pushing his own candidates through a full Senate-approval process. PROMESA also contains a number of additional provisions, including freezing bond payments until next year, a mandate to continue funding pensions, a lower minimum wage for young workers in Puerto Rico, and a limitation of special restructuring authority to islands.

With a failing public-services grid, crumbling infrastructure, a rapidly declining tax base, the threat of Zika straining an already eroding health-care system, PROMESA provides immediate relief. In the near future, officials won’t be forced to prioritize paying creditors versus paying for life-saving medicines in public hospitals. The island can pay to keep the lights on without risk of being sued for unpaid debts. The immediate need to restructure and prevent defaults trumps most other concerns with the bill and with Puerto Rico’s status. That sentiment is echoed by award-winning playwright Lin-Manuel Miranda in a recent op-ed for The New York Times. “If a ship is sinking,” he wrote, “you don’t ask, ‘Well, what type of ship is it and what type of ship should it be?’ You rescue the people aboard.”

But if and when the people on the ship are rescued, there are real ramifications for the future of Puerto Rico and America’s other territories. With the famous Insular Cases being reassessed in high courts right now, the Oversight Board installed by Congress and appointed by the president brings to mind the days of Theodore Roosevelt. The board would not be subject to any Puerto Rican authority and is bound by PROMESA to make decisions that are in the interests of Puerto Rico’s creditors. If it isn’t colonialism, it certainly looks like it. Puerto Rico Governor Alejandro García Padilla accepted the restructuring as necessary but said the extraordinary power of the board was “not consistent with our country’s basic democratic principles.”

The Oversight Board, new rules for restructuring in territories, and a lower minimum wage for young workers in Puerto Rico make it abundantly clear that Puerto Rico is not a state nor is it an entity approximating a state. This is a reaffirmation of the island’s status as an unorganized territory and an implicit recognition that citizens and inhabitants of the United States territories simply do not possess the same right to self-governance as people do on the mainland.

Ultimately, hospital staff trying to fight Zika with limited running electricity and water or educators running crowded classrooms may not care right now about the long-term ramifications of PROMESA. Emergencies call for emergency action, and more often than not, those actions require compromises of the kind that leave every side unhappy. PROMESA will probably save lives and will likely save many people from financial ruin. But it also promises a new round of debate about just what Puerto Rico is, who Puerto Ricans are, and what place the United States has in the commonwealth’s affairs.