House Republicans are reworking a bill to address Puerto Rico’s debt crisis and have no clear timeline for action.
Following a closed-door meeting Friday, members emerged sounding optimistic about the fate of the bill. But it was also clear some changes would be in the works, and few members were willing to sign on until they see the final product.
{mosads}“The bill is not going to change substantially,” said House Natural Resources Committee Chairman Rob Bishop (R-Utah). “But if we can tweak a few things to give people a comfort level, we will.”
House Republicans were forced to meet Friday to specifically discuss the bill after a hastily canceled markup Wednesday.
Lawmakers said that they and many of their colleagues simply needed to go through the bill’s provisions.
“Most of us, this is the first time dealing with this issue,” said Rep. Raúl Labrador (R-Idaho). “Even me, being born and raised in Puerto Rico, it’s something I never really thought about.”
Most members described the tenor of the meeting as educational and productive. But it still isn’t clear when GOP leaders could come out with a refined bill, and exactly how much support they can expect to get for it.
A central challenge is refining the bill to calm conservative concerns without alienating Democrats whose support will be necessary for the bill to ultimately become law.
One of the concerns from conservatives is they want to ensure that public pensions and unions are not given priority over investors in Puerto Rican debt. The bill does not do that, but Democrats are pushing to ensure pensioners see their benefits paid in full.
The outside control board that would be created under the law would be filled by officials nominated by top Democratic and Republican policymakers. The board would oversee the island’s finances, and would have the power to direct Puerto Rico to go to court for debt restructuring, if voluntary negotiations fail to produce a deal.
Another concern from Republicans is whether allowing Puerto Rico to rework some of its $72 billion in debt could have a ripple effect in other public debt. Several lawmakers said they wanted to make sure the bill would not drive up the cost of the debt issued by their home states if investors began to see those bonds as riskier as a result of the bill.
Lawmakers may get an answer to that question as Puerto Rico is facing a May 1 default that could roil financial markets and it appears as if Congress is unlikely to beat that deadline.
Bishop said his panel could resume work on the bill as soon as next week, but that would be an extremely quick turnaround.
“I want to do this as soon as humanly possible. Maybe by the end of this month, but it may go into May,” he acknowledged.
“I think maybe May 1 will show this is serious,” he added. “I think people who are not taking this seriously will take it seriously at that point.”
Speaker Paul Ryan (R-Wis.) has been a staunch defender of the legislation and has been adamant that the bill, which establishes an outside control board for the island’s finances in exchange for letting Puerto Rico restructure some of its debt, is not a bailout.
One of the central goals of Friday’s meeting was to drive home that message, after outside groups launched an ad campaign describing the bill as a bailout. Ryan left the meeting without speaking to the press, but it appears as if leaders were able to convince members on that point at least.
“I don’t think anybody thinks this is a bailout. Even the folks who are most adamantly oppose to this bill in its current form do not think this is a bailout,” said Rep. Mick Mulvaney (R-S.C.). “The bailout discussion is absolutely off the table.”
Several members criticized the ads, calling them disingenuous and misleading. The ads have come from a group called the Center for Individual Freedom, which does not have to disclose its donors.
Mulvaney said he was undecided on the bill, but it was clear there was still a subset of conservative discontent around the idea of doing anything on Puerto Rico at all.
“We didn’t cause the problem. Puerto Rico caused the problem,” said Rep. John Fleming (R-La.).
That argument led to a prolonged constitutional debate among House Republicans. Backers of the bill pointed to Article IV of the founding document, which stipulates that Congress shall “make all needful rules and regulations respecting the territory.”
“Congress, whether we like it or not, still has control over and authority over territories. That’s a constitutional requirement,” said Bishop. “We must respond in some way.”
Mike Lillis contributed to this report.