Rothfus Votes to Prevent Taxpayer Bailout of Puerto Rico and Restore the Island's Economic Stability

Press Release

Today the House passed H.R. 5278, the Puerto Rico Oversight, Management and Economic Stability Act of 2016 or PROMESA. This bill is needed to prevent a taxpayer bailout of Puerto Rico's debt and seeks to restore fiscal discipline to the commonwealth, a U.S. territory whose residents are U.S. citizens. After decades of mismanagement by the Puerto Rican government, the island faces a severe debt crisis, high unemployment, and extensive population flight. Puerto Rico has already defaulted on portions of its debt and additional defaults are expected in the future if Congress fails to act.

PROMESA establishes a fiscal oversight board for the territory with wide-ranging powers that will enable it to enact and enforce fiscal plans and reforms aimed at ensuring that the territory of Puerto Rico becomes fiscally sustainable and can once again access capital markets. The oversight board's powers include the authority to force the sale of government assets, reduce the public sector workforce, consolidate agencies, and to block legislative acts, executive orders, and other initiatives from Puerto Rico's government. Under PROMESA, the oversight board will also be responsible for overseeing any future debt restructuring. This bill also exempts the territory from the Department of Labor's Overtime Rule and provides regulatory certainty to investors wishing to redevelop the territory's outdated infrastructure.

Notably, this legislation provides no taxpayer funds to pay Puerto Rico's debt and ensures that any debt restructuring authorized under the supervision of the oversight board falls within the confines of the territorial clause of the U.S. Constitution, insulating the states from contagion in the municipal bond markets.

Congressman Keith Rothfus [PA-12] supported the legislation and released the following statement:

"Today, we acted to prevent a taxpayer bailout of Puerto Rico under circumstances that require urgent action. For a decade, terrible economic policies, mismanagement, and out-of-control government spending have brought about economic decline and stifled opportunity on the island. PROMESA is not a silver bullet for these serious problems, but it takes important first steps to prevent a taxpayer bailout and get Puerto Rico back on a path to economic stability," said Congressman Rothfus.

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