austerity, “colonial control” board, bankruptcy, Barack Obama, debt, default, economics, Financial Oversight and Management Board for Puerto Rico, PROMESA, Puerto Rico, Puerto Rico Oversight Management and Economic Stability Act
Earlier this summer Puerto Rico which is $70 billion plus in debt defaulted (third default) on $779 million worth of general obligation bonds. The day before Barack Obama signed into legislation, Puerto Rico Debt Crisis Bill aka PROMESA (Puerto Rico Oversight, Management, and Economic Stability Act) which will undoubtedly lead to U.S.-imposed austerity measures on the federal territory.
Tasked with overseeing Puerto Rico’s debt problem is the Financial Oversight and Management Board for Puerto Rico, a bipartisan group of seven individuals, four of whom were selected by House Speaker Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky. And the remaining three by Obama.
The appointees are:
- Andrew G. Biggs* – resident scholar at the American Enterprise Institute and former deputy commissioner in the Social Security Administration;
- Jose B. Carrión III* – a native of Puerto Rico, president and principal partner of HUB International, an insurance brokerage firm in Puerto Rico;
- Carlos M. Garcia* – CEO and founder of BayBoston Managers LLC and board chairman of Caribbean Financial Group Holdings, L.P.;
- Arthur J. Gonzalez** – retired Chief Judge of United States Bankruptcy Court, Southern District of New York, Senior Fellow at New York University School of Law (NYU) and former adjunct professor at NYU;
- José R. González**– Chief Executive Officer and President of Federal Home Loan Bank of New York (FHLBNY);
- Ana J. Matosantos**– President of Matosantos Consulting, former Director of California’s Department of Finance, former Chief Deputy Director for Budgets and former Deputy Legislative Secretary for Health and Human Services and Veterans Affairs. All positions were with the debt laden state of California; and
- David A. Skeel Jr.* – corporate law professor at the University of Pennsylvania Law School.
In addition to restructuring Puerto Rico’s $70 billion debt, according to a White House press release, the seven member board which has been dubbed by Communists recognizing an opportunity the “colonial control” board, would oversee collaborate with the government of Puerto Rico to “create the needed foundation for economic growth and to restore opportunity to the 3.5 million Americans of Puerto Rico….”
The CBO estimated the cost to American taxpayers of operating the Oversight Board for Puerto Rico is $370 million covering the fiscal period 2017 to 2022.
Obama’s Oversight Board will be charged with “powers to approve, for territory governments or instrumentalities of those governments (such as public corporations or municipal governments):
- Fiscal Plans;
- Voluntary agreements with bondholders;
- Debt restructuring plans; and
- Critical projects eligible for expedited permitting processes.
The citizens of Puerto Rico are outraged, not at its government spending and corruption (this week anyway) but that the legislation passed along with the creation of an oversight board “to rule over Puerto Rico” not elected by the citizens of Puerto Rico will make decisions that are not in the interests of Puerto Rico and its citizens.
The idea of a Republican-imposed fiscal control board, known colloquially as La Junta in Puerto Rico, is largely reviled on the island.
Opponents argue it will be oblivious to the social needs of Puerto Rico and impose harsh austerity measures, including severe cuts in public services and pension funds. …
U.S. Senator Bernie Sanders called the PROMESA bill “both a political and economic disaster for the people of Puerto Rico” that “takes away their democratic rights and self-governance and will impose harsh austerity measures, which will make the poorest people in Puerto Rico even poorer….”
[Those evil Republicans how could they? What about the three Progressives appointed by Barack Obama?]
Hundreds or dozens (depending on whom you ask) took to the streets of Puerto Rico Wednesday to protest Obama’s legislation and the installation of his oversight board thru 2022.
Protesters threw rocks and bricks as they blocked the entrance to the San Juan’s Condado Plaza Hilton hotel where members of the board were attending a gathering organized by the National Puerto Rico Chamber of Commerce (CCPR).
A viewpoint as told by Democracy Now blaming capitalism and the evil United States.
On Wednesday, hundreds of protesters in Puerto Rico blocked a street in front of a hotel where bankers and business executives were gathering for a conference hosted by the Puerto Rico Chamber of Commerce. Meanwhile, a new report from the ReFund America Project has revealed firms like UBS, Citigroup, Goldman Sachs and Barclays Capital have collected $1.6 billion in underwriting fees from Puerto Rico since 2000 just for refinancing bonds to pay interest and fees on older bonds….
The result of failed social engineering policies, government dependency that morphed into an entitlement mentality of the masses, government spending and corruption put Puerto Rico on this road to austerity. A long time coming, this can get ugly for both Puerto Rico and the United States.
Cross-posted on Wow! Magazine.