Puerto Rican officials slam GOP debt plan

Puerto Rican officials slam GOP debt plan
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Puerto Rico's chief liaison to the federal government said Monday that the Republican plan to tackle the commonwealth's debt crisis overrides the island's constitution and leaders.

"The scope of the proposed fiscal oversight board is both too broad and directly contradicts the relationship that has developed between Congress and Puerto Rico over the last 66 years," Juan Hernandez, director of the Puerto Rico Federal Affairs Administration, said.

"[We] will continue to work with the entire membership of Congress to ensure that a fair and bipartisan bill can be drafted that will achieve the dual goals of fiscal responsibility and national sovereignty," added Hernandez, who oversees the commonwealth's outreach in Washington.

Puerto Rico's governor and congressional representative and top Washington, D.C. have also railed in recent days against the fiscal oversight board floated in the draft plan drawn up by the House Natural Resources Committee.

That board would control the process meant to fix Puerto Rico's $70 billion debt and could implement changes whether or not the commonwealth's government approves of them.

“If in exchange for the legal faculty for an orderly debt restructuring a supervision board is necessary, neither its point of departure nor its conclusion can be the assassination of Puerto Rican democracy,” said Puerto Rico Gov. Alejandro García Padilla (D) on Saturday, according to The Associated Press.

García Padilla promised to challenge in federal court any law that establishes a body that takes power away from the government.

The five-person fiscal review board created by the Republican draft plan would not answer to Puerto Rico's governor or legislature. The board would audit the commonwealth's government, gear it toward fiscal solvency and determine how much debt restructuring would be necessary. The option to settle disputes in court would be a last resort.

Del. Pedro Pierluisi, Puerto Rico's delegate to Congress, rejected the board's ability to implement changes “over the objections of the Puerto Rico government.”

“While I doubt the board would ever exercise this power, it should not even have it,” said Pierluisi.

Though the debt bill is in its earliest form, Republicans have insisted on an oversight board as part of any package. The Republican bill also does not give Puerto Rico access to Chapter 9 bankruptcy protection. Democrats have demanded that Chapter 9 be extended to the commonwealth.