As we’ve said before Puerto Rico is Detroit with palm trees. Its massive patronage system, its army of “public” employees and big government generally bankrupted the island. Now the Dems want the government employees to get the pensions for which there is no money, all the while stiffing the people who lent Puerto Rico the money it now owes.
There are pretty much no good guys here. The government workers are to blame. The bondholders knew they were buying sketchy stuff but assumed they’d be indemnified. Both groups knew Puerto Rico is and was a fiscal mess. My bet, sadly, is that both groups of cronies will probably get bailed out. At our expense of course.
What Puerto Rico really needs is a radical rework of the government and economy on the island. It could be a very wealthy place, a Singapore of the Caribbean if it can just jettison the legacy of crony government which hangs around the neck of too much of Latin America.
The sticking point Tuesday and Wednesday was a provision added by House Republicans that would essentially cancel the effects of the bill if an oversight board hasn’t been named by Jan. 3, as well as how the board would be composed. They fear the Obama administration could wait out this current Congress until a new Senate, possibly under Democratic control, is sworn in, giving Democrats a majority on the federally appointed board created by the bill to oversee Puerto Rico. The bill does not appear to have that sunset provision, and contains other language meant to prevent stalling the creation of an oversight board.
The board to oversee budgetary matters on the island will be made up of seven people total, with three-year terms. Two can be picked, one each, from two entirely different lists of experts drafted by Ryan. Another two can be selected from another list provided by Senate Majority Leader Mitch McConnell. One each can be selected from lists provided by House Minority Leader Nancy Pelosi and Senate Minority Leader Harry Reid, while the last can be at the sole discretion of President Barack Obama. The process repeats when a board member, or members, needs to be replaced.