Congressional Hearing Examines Puerto Rico Debt Crisis

international | economics and finance | press release Tuesday February 02, 2016 22:02 by Greg Williams - Jubilee USA

Religious Development Group Testifies on Human Impacts

The US House of Representatives held its second hearing on Puerto Rico's debt crisis this year. The hearing focused on potential legislative solutions including bankruptcy protection and an economic oversight board.

Washington DC - The US House of Representatives held its second hearing on Puerto Rico's debt crisis this year. The hearing focused on potential legislative solutions including bankruptcy protection and an economic oversight board. At the hearing, Puerto Rico Congressperson Pedro Pierluisi announced that the Natural Resources Committee will draft legislation to address the crisis based on independent oversight and bankruptcy.

Former Washington DC mayor, Anthony Williams and Eric LeCompte, head of the religious development group Jubilee USA, were among the experts who testified to twelve Members of Congress on the Committee. "This hearing is exactly the type of attention this crisis needs," stated LeCompte. "It was a constructive conversation and now it's critical that Congress acts."

The hearing, "The Need for the Establishment of a Puerto Rico Financial Stability and Economic Growth Authority," took place in the Subcommittee on Indian, Insular and Alaska Native Affairs within the Committee on Natural Resources. Beyond the testimony provided by former DC Mayor Williams and Jubilee Director LeCompte, statements were heard from ‎Carlos Garcia, Former Chairman and President of the Government Development Bank of Puerto Rico; Professor Simon Johnson, Professor of Global Economics and Management, MIT Sloan School of Management; and Thomas Moers Mayer, Partner at Kramer Levin Naftalis & Frankel, LLP.

Two pieces of legislation would grant Puerto Rico's municipal entities access to Chapter 9 bankruptcy protection. One of those bills, introduced by Republican Sean Duffy, would also create an economic oversight board to monitor the island's finances.

"A bankruptcy process and budget transparency are both critical to a solution for Puerto Rico." LeCompte commented.

LeCompte noted the impact of self-imposed austerity on the island, including cuts to health spending as the Zika virus now spreads in Puerto Rico. Some special education teachers are now not being paid and the island may not be able to fulfill pension obligations. Puerto Rico owes $72 billion in total debt and it's debt per person ratio is six times the median average of US states.

"The situation on the island is grave," stated LeCompte, who works with religious leaders representing more than 95% of the island's population. "Austerity isn't the answer, Puerto Rico can't cut or tax its way to economic growth."

Jubilee USA Network is an alliance of more than 75 US organizations and 550 faith communities working with 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org