Tuesday, June 14, 2016

Morgan Griffith on PROMESA

From U.S. Representative Morgan Griffith (R-VA-9):



The tragic and horrific terrorist attack in Orlando is a sobering reminder that we are living in a dangerous world. As we mourn, we first turn to prayer, and pray for those killed or injured, for their loved ones, and for the people of Florida. In the days ahead, as our fight against terrorism continues, we must remain vigilant and, without sacrificing our civil liberties, work to protect American citizens and defeat this evil.

Hard Decisions

As I speak with constituents and travel throughout the Ninth District, folks say, “Do the right thing.”

I reply, “I won’t get ‘em all right, but I do my best.” Unfortunately, sometimes there is no way of knowing what is “the right thing.” So I’ve got to use my best judgment and hope I get it right.

A current example of this is the financial situation in Puerto Rico. I explained more in-depth in my column of April 25, but Puerto Rico – which is a territory of the United States rather than a sovereign state – has more than $118 billion in debt in the form of bonds and unfunded pension liabilities. It has already defaulted on portions of its debt, and also has not produced audited financial statements for two years.

This is in part because Congress in the 1950s gave Puerto Rico the authority to have its own legislature and make decisions for themselves. They didn’t do well, and now are in a critical and difficult situation.

After holding several hearings on this crisis, the House Committee on Natural Resources (which has jurisdiction over U.S. territories such as Puerto Rico) developed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA, H.R. 5278).

It is and was not clear to me if “the right thing” is supporting this legislation. What I strongly believe, as I have said before, is that action must not be a bailout by the taxpayers of the 50 states.

When I find myself in these situations, I do my research and confer with colleagues whose opinions I trust and value.

In this instance, some of these colleagues felt the legislation is problematic and may have legal implications for the various States in the Union as well as the territory of Puerto Rico, and may allow indebted States such as Illinois to also pursue a similar legal framework for restructuring debt.

Other trusted colleagues feel the legislation does not set a precedent for the various States in the Union, and is the right thing to do at this time.

Regarding precedent, however, this legislation would apply solely to territories. High-spending States like Illinois are not territories. There is a huge legal and constitutional difference between the States of the Union and a territory. Accordingly, the oversight board established under the legislation for the territory could not constitutionally be established for States, because the various States are sovereigns (when the original States formed the federal government, they retained a significant portion of their authority and power, i.e. sovereignty).

Sometimes, when experiencing a conflict of opinion, the safer action to take is to vote no. In this predicament, if we do not create for Puerto Rico a mechanism by which they may restructure their debt, then they will ask for cash grants, i.e. a bailout. As a territory of the U.S., the federal government is responsible for Puerto Rico. But I will not vote for a cash bailout of Puerto Rico.

Further, as a colleague of mine from Texas noted, if the Democrats win the presidential race in November and Congress has not taken action, there is no question in my mind the newly elected president would push for a bailout program which would cost taxpayers tens of billions of dollars.

The legislation known as PROMESA is filled with many legal landmines and, to succeed, it will take effort and skill on the part of the oversight board as well as a willingness by Puerto Rican leaders to make hard decisions. Time will tell if PROMESA will solve the problem in Puerto Rico. But it is clear to me that doing nothing would guarantee a taxpayer-funded bailout in the not too distant future. PROMESA has the potential to prevent a bailout, and accordingly I supported it.

PROMESA presented a tough decision. Historians can debate in the future whether Congress did the right thing, but, in the here and now, I know I did my best.

If you have questions, concerns, or comments, feel free to contact my office. You can call my Abingdon office at 276-525-1405 or my Christiansburg office at 540-381-5671. To reach my office via email, please visit my website at www.morgangriffith.house.gov. Also on my website is the latest material from my office, including information on votes recently taken on the floor of the House of Representatives.