2015 is a turning point in the economic and legislative relationship between Puerto Rico and the rest of the country: it is up to Congress to decide whether that relationship will be characterized by equality and sustainable progress or costly disputes affecting citizens in the states as well as in Puerto Rico.
I am proud to be part of the Puerto Rico Financial Stability Coalition (www.stability4PR.com), supporting the Puerto Rico Chapter 9 Uniformity Act (H.R. 870). H.R. 870 would permit the insular government to authorize public instrumentalities on the brink of financial ruin to obtain a path to recovery under U.S. law – something that is authorized in the states but not Puerto Rico. From a bankruptcy policy perspective, I do not believe that the current exclusion ever made sense; it certainly doesn’t make any sense now. Puerto Rican bonds are heavily traded in the U.S. municipal bond market, so the legal rules should be the same in Puerto Rico as they are in the 50 states.
H.R. 870 offers Puerto Rico a road to recovery that will both honor its obligations to American investors and lead to safe investment and economic growth in years to come. Without the right for troubled government entities to restructure obligations, collective debt may overwhelm Puerto Rico as a whole, and a federal bailout will be required. To save taxpayers billions of dollars, Congress must pass H.R. 870 and extend to Puerto Rico the right to enable its municipalities to reorganize their debts in good faith under federal bankruptcy law. As part of the United States and home to more than 3.5 million U.S. citizens, government entities in Puerto Rico should be entitled to pursue the same routes to economic recovery, stability, and prosperity that are available to those in any U.S. state.
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