Is the Puerto Rico Deal Good for the Island & Taxpayers?

U.S. Treasury Secretary Jack Lew has called the deal “a fair, but tough bipartisan compromise.” // File Photo: U.S. State Department.

U.S. House Republicans and the Obama administration on May 18 reached a deal on legislation to help Puerto Rico reduce its massive $72 billion debt load. The agreement would set up a federal oversight board and would allow some workers on the island to be paid less than the federal minimum wage, among other provisions. Is the agreement a good deal for Puerto Rico and U.S. taxpayers? Would it help the U.S. territory get on the right financial footing for the long term? What are the consequences if the measure does not win congressional approval and become law?

Kenneth McClintock, former secretary of state and lieutenant governor of Puerto Rico: “The PROMESA bill agreed upon by House Republicans and the Obama administration and marked-up by the House Natural Resources Committee on Wednesday does facilitate Puerto Rico’s debt restructuring but at a very high cost—impairment of Puerto Rico’s right to self-government, placing our young in virtual servitude with sub-minimum wages, promoting an increase in depopulation and virtually no incentives for sustained economic growth. The looming July 1 deadline for a massive default has forced many, including former Secretary of State Hillary Clinton, to grudgingly accept this bill as a temporary fix and necessary evil, but much more will be required for Puerto Rico to recover from this crisis. Undoubtedly…”

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