Hispanic leaders converge on D.C.to demand action for Puerto Rico’s debt crisis. Photo credit: newsis mybusinesscom
Bill Sarno
CTLatinoNews.com
Having delivered their arguments and impassioned pleas for a swift resolution to Puerto Rico’s $72 billion debt crisis in person at the U.S. Capitol in Washington, D.C. during the recent National Day of Action for Puerto, Hispanic leaders and their political allies say they will continue to press this week for Congress to provide relief for the economically battered island.
Photo credit: panampost.com
These efforts, including a massive phone campaign targeting key figures in the quest for congressional action, have taken on added urgency because time may be running out for Congress and the Obama Administration to work out an effective strategy that would spare the territory’s 3.5 million residents from an impending economic disaster and humanitarian calamity.
Jose Laluz Photo credit: dacd.org
Jose La Laluz, a Hispanic political activist who represented organized labor at the Day of Action, said, said that Congress needs to move by Friday, Dec. 11 on the latest Omnibus Budget Reconciliation Bill in order to keep the government going. If Puerto Rico’s needs are not addressed in that bill, La Luz said, the island’s hopes for congressional relief may be “dead.”
The Hispanic community’s cause also is being championed in Washington by several Democratic senators including Chuck Schumer of New York and Richard Blumenthal of Connecticut.
“We are in discussions with colleagues on both sides of the aisle and are hopeful,” Blumenthal said Friday. He explained that these talks involve some “complex and difficult issues” but stressed that Puerto Rico needs to be treated fairly and that an orderly debt relief process needs to be agreed upon as soon as possible.
Default and the ensuing economic chaos could come as soon as January 1, when Puerto Rico’s public agencies face a nearly billion dollar loan payment. La Luz noted that the commonwealth was barely able to scrape together $350 million for a payment last month and already has taken some extreme savings measures such as closing 100 schools.
Blumenthal played a major role Wednesday at the Day of Action, when over one thousand community, labor and government
Senator Richard Blumenthal (D) CT was quoted as saying, “”I cannot conceive that Congress will tell 3.5 million U.S. citizens to drop dead.”
Photo credit: ctmirror.org
leaders converged at the Capitol and called on Congress to grant the commonwealth the ability to declare bankruptcy and to pass measures that would eliminate Medicaid funding inequities and extend the Earned Income Tax Credit and the Child Tax Credit to help Puerto Rican families and spur economic growth.
Puerto Rico, as a U.S. territory, cannot restructure its debt by declaring bankruptcy, a tactic available to U.S. states and cities such as Detroit to deal with its debt. Republican congressional leaders and their friends in the financial community argue that changing this status would lead to chaos in the municipal bond markets.
In this regard, Puerto Rico received some good news Friday when the U.S. Supreme Court agreed to hear the commonwealth’s appeal to reinstate its 2014 debt restructuring law that would help the island’s utilities and highway authority deal with about $20 billion of the debt. That law was struck down by courts earlier this year.
The Supreme Court’s action is meaningful, La Laluz said. The two cases involved in the appeal, however, might not be argued until the end of spring with a decision by the end of June, according to nytimes.com.
Consequently, the immediate concern is whether the Republicans, who control Congress, will allow Puerto Rico to reorganize its debts under Chapter 9 of the U.S. Bankruptcy Code, do nothing, which could quickly lead to a massive default, or craft some other solution, one that La Luz suspects would do more to help the investors than to relieve the economic hardships that are causing thousands to leave the island.
An important figure in any discussion of relief is Sen. Marco Rubio, a Republican from Florida. A presidential candidate, Rubio represents a state in which more than a million Puerto Ricans already live and hundreds more are arriving every week.
Asked Friday what Rubio’s current views on the Puerto Rican situation are, a spokesperson said his positions are clearly enunciated in an opinion piece the senator issued in September.
Rubio asserts in this politically charged statement that what the island needs is not bankruptcy protection, but to vote for statehood. He said: “Allowing Puerto Rican municipalities to reorganize their debt under Chapter 9 of the U.S. Bankruptcy Code would not solve Puerto Rico’s problems and should only be a measure of last resort considered if Puerto Rico takes significant steps to fix its budget and economic mess.”
Rubio also maintained that the ultimate cure for the island’s lingering economic maladies is for the island’s “liberal” leaders to correct their ways. He adds that the policies of President Obama and Hillary Clinton, who seeks to succeed him, stand in the way of a “Puerto Rican renaissance.”
Another prominent figure at the Day of Action, Jose Calderon, president of the Hispanic Federation, a multi-state coalition of Latino support agencies, including several in Connecticut, on Saturday announced that there will be a week-long national phone bank effort starting Monday, December 7 to demand protections and allocations for Puerto Rico in the upcoming Omnibus Bill.
“We have just a few short days before the deadline for Congress to take action for Puerto Rico and must continue to build on this amazing momentum,” Calderon said, referring to the impact of the Day of Action.
La Luz said that a representative of an influential Republican senator was quite blunt and candid that the senator receives significant campaign funds from the hedge funds that hold significant portions of Puerto Rico’s debt.
Blumenthal said Friday that he his trying to counter the argument made by some of his Senate colleagues that allowing Puerto Rico to declare bankruptcy “is an evil precedent.” The state’s senior senator noted that some resistance is coming from the financial community and that some of the bond holders “have spoken to a number of his colleagues.”
The Day of Action was actually a two-day lobbying and mobilization initiative.
On Tuesday, a series of congressional briefings took place. La Luz, who spoke on how the debt crisis would impact Puerto Ricans stateside, said several dozen congressional staffers participated, including those representing Sen. Elizabeth Warren of Massachusetts, Sen Bernie Sanders and Blumenthal among the New England contingent.
During the briefing, speakers spoke about debt relief, better health care funding for the island residents and access to the Earned Income Tax Credit to spur economic growth and help families.
La Luz warned the congressional staffers that more Puerto Ricans will make the “desperate journey” to areas such as Florida, Connecticut and other states where “there are no jobs and no housing awaiting them.”
On Wednesday, what La Luz described as a massive lobbying effort took place, with Hispanic advocates such as Ingrid Alvarez, Connecticut director of the Hispanic Federation, and others from the Nutmeg State among the participants.
Nearly 1,000 people from a dozen states traveled to Washington D.C. for the National Day of Action for Puerto Rico, Calderon said. “Together, we visited over 150 Congressional offices and made over 1,000 phone calls to members demanding action.”
The attention the Day of Action was receiving from television and other media, however, came to a sudden halt late Wednesday morning when the news of the San Bernardino massacre reached Capitol Hill.
Still, La Luz said that the Day of Action was “immensely successful in bringing attention to the Puerto Rico crisis.”
La Luz said Democrats were more receptive to their message, but some said they needed more information about the potential impact of a Puerto Rico economic meltdown.
The discussion of how a default could have a negative impact on the municipal bond market, La Luz said, “got the attention of practically all the Republicans.” He added they seemed to “care more about investors than the Puerto Rican people.”
La Luz noted that one issue with impact is that default would send the debt holders into the courts where the outcome would be uncertain and where Puerto Rico might not have the financial resources to press its case.
Wednesday’s agenda included a press conference where Sen. Warren of Massachusetts, said pressure also needed to be applied to the White House, which the Democrat said has not done all it should.
An especially impassioned call for action, La Luz said, came from Blumenthal. In a statement of reminiscent of President Ford’s 1975 rebuff to financially stressed New York City, the Connecticut senator said, “I cannot conceive that Congress will tell 3.5 million U.S. citizens to drop dead.”
