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.