Short version: PROMESA would grant bankruptcy protection to Puerto Rico. (Since I hate these cutesy names Congress loves, I will henceforth call it the Puerto Rico Oversight Act.) But the bill would also put P.R. under a fiscal receivership. An Oversight Board appointed by the President of the United States from lists submitted by Congressional leaders. The Board would essentially take control of the island’s budget process. In return, the Board would get the power to take Puerto Rico’s creditors to bankruptcy court, including the holders of general obligation debt. (That suspends a provision of the Puerto Rican constitution.) The board would also have the power to suspend federal minimum wage laws.
The Oversight Act is a less-than-great deal, but it is also less than it seems. First, without it Puerto Rico’s creditors will tie the place up in lawsuits. Nobody wants a board forcing budget cuts, but it’s better than a bunch of vulture funds making the decisions. Second, Puerto Rico will have to cut its budgets in any case: it can’t afford to borrow any more. The Board might make stupid decisions, but austerity is sadly already backed in the cake. Third, Puerto Rico will be able to restructure general obligation bonds. That is more than most plans involved; in fact, it gives Puerto Rico a power that most states lack. (Although to be honest, the law on that is less than clear. Start with the 11th Amendment and go from there.)
Senator Sanders opposes the bill, calling it colonialism. And he’s right! It is.
But what’s his legislative strategy to replace it and replace it quickly? Because the bill is way better than the status quo.
I don’t think he has a plan. I think this is an easy way to score political points, same as Senator Rubio did back when he was running for President. If it’s cheap talk, then I’m okay. But if he’s really mobilizing Democratic opposition, then he’s doing immense damage to the people of Puerto Rico and giving lots of power to hedge funds and their lawyers, aka “Wall Street billionaires.”
It would be ironic if actual livelihoods weren’t in the balance.
I would like to believe that the Senator from Vermont does indeed have a secret plan to get a better bill through, but I don’t.