By Juan E. Hernández
Puerto Rico is currently going through a deep fiscal crisis — its debt burden is unsustainable. If Congress doesn’t act soon by granting Puerto Rico’s public corporations access to Chapter 9 of the U.S. Bankruptcy Code, 3.5 million American citizens living in Puerto Rico will suffer.
Gov. Alejandro García Padilla has embarked on a mission to bring structural reforms to Puerto Rico. These include streamlining government, reducing spending, increasing revenues, and promoting economic development. And while these efforts can be fruitful, they will fall short if Puerto Rico is not able to reorganize its public corporations under the orderly process of Chapter 9.
Chapter 9 provides a legal and organized framework to deal with the island’s current fiscal crisis. The measure would provide badly needed debt relief at a time when the commonwealth’s future hangs in the balance. It will certainly not solve the crisis overnight — Puerto Rico’s problems have been decades in the making — but it is the right first step in a process that requires the best efforts of our elected officials.
Politicians from across the aisle — nationally and on the island — have come together and recognized the urgent need to amend Chapter 9 to include Puerto Rico. Both the local Commonwealth Party and the Statehood Party are working together to encourage Congress to pass H.R. 870, which would allow Puerto Rico to work with its creditors and constituents to achieve a sustainable long-term solution and enable the government to continue providing essential services to Puerto Ricans in the short-term.
Democrats such as Hillary Clinton and Martin O’Malley agree with Republican Jeb Bush that Chapter 9 would give Puerto Rico a fair shot at getting its fiscal house in order. Independent Sen. Bernie Sanders, running for president as a Democrat, has also come out in favor of granting the island’s municipalities and public corporations the right to file for Chapter 9.
The Chapter 9 issue should be of particular importance to the Virginia delegation in Congress. For the first time in history, more Puerto Ricans live on the mainland than on the island — and some of them are calling Virginia, home.
Virginia has been one of the destinations for Boricuas moving to the mainland or relocating within the U.S. In the decade that ended in 2010, nearly 74,000 Virginia residents identified themselves as Puerto Rican. Puerto Ricans in Virginia are paying careful attention to this issue and will certainly keep this in mind when casting their vote in 2016.
Congress needs to act swiftly on this common-sense, bipartisan issue. Federal bankruptcy law was never meant to exclude Puerto Rico — granting the island access to Chapter 9 needs to be done to correct a simple oversight. Chapter 9 was born as a policy during the Great Depression, when communities all over the country needed relief to provide basic services and protect their most vulnerable citizens. The law already exists for the purpose of helping places like Puerto Rico deal with crises. It simply needs to be modified to meet this challenge.
Filing for Chapter 9 does not give carte blanche to Puerto Rico’s government to walk away from its debt. The Governor’s efforts to reform Puerto Rico will require shared sacrifices from everyone — government, citizens and creditors. Bankruptcy is a complicated, painful process, but it is the best option available for all concerned parties to reach consensus and achieve a solution for the long-term.
It is now Congressman Goodlatte’s time to act.
If Puerto Rico cannot obtain access to Chapter 9, its citizens face grave risks. Essential services like water and electricity could be shut off, businesses and residents could flee, and the island’s economy could collapse.
García Padilla has already taken difficult steps to address the crisis he inherited, and he is prepared to take more as needed. Chapter 9, or an equivalent local law, is the only solution that will allow Puerto Rico to honor its obligations while providing hardworking Puerto Ricans with the essential services they deserve.
Washington needs to do its part and come together to give Puerto Rico a fighting chance — before it is too late.
Puerto Rico Federal Affairs Administration Director Juan E. Hernández is the Representative of the Governor of Puerto Rico in Washington D.C.
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AFP
