Hasta La Gadget!

WASHINGTON — The House is set to move on Republican-crafted legislation next week that would give Puerto Rico powers to restructure its crippling debt. After one failed markup and three drafts, the hard part should be over.

Or not. While Democratic leaders appear ready to support the revised bill, a number of progressives and unions representing workers on the island are concerned about the new text.

Namely, some lawmakers are wary of the bill because it creates a seven-person financial oversight board authorized to help the commonwealth restructure its $70 billion in unpayable debt and draft an economic recovery plan.

Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) issued the strongest rebuke of any politician, calling the board a move in the “wrong direction.”  

“This undemocratic board would have the power to slash pensions, cut education and health care, and increase taxes on working families in Puerto Rico,” Sanders said in a statement issued by his Senate office. “That is unacceptable.”

Sanders argued that the oversight board will be structured in a way that favors Republican policies.

“Majority Leader [Mitch] McConnell (R-Ky.) and Speaker [Paul] Ryan (R-Wis.) would be in charge of handpicking a majority of the control board’s members, while the people of Puerto Rico would be in charge of choosing none,” he said. 

Sanders has opposed the Puerto Rico bill since its first draft emerged in late March. He has framed the island’s debt crisis as part of the Wall Street-versus-Main Street battle that has been a fundamental theme of his campaign — a message he took to Puerto Rico on Monday, where he was campaigning ahead of the island’s Democratic primary on June 5.

Hillary Clinton, who is leading Sanders in the race for the Democratic presidential nomination, offered qualified support for the House legislation in a statement released by her campaign.

Meanwhile, House Democrats like Rep. Xavier Becerra (D-Calif.), chair of the House Democratic Caucus, and Rep. Luis Gutierrez (D-Ill.) are withholding their support for the bill until they review more of the text. 

“My hope is to support a bill that helps the people of Puerto Rico, that protects them from the vulture capitalist hedge funds that want to cash-in on the Island’s misery,” Gutierrez said in a statement after the bill’s release.

The oversight board raised some red flags for Gutierrez, he said, but he wants to get to a “yes.” That’s precisely the predicament Democrats and the Obama administration are facing: This isn’t the bill they would have written, but they’re running out of time as the commonwealth stares down the barrel of a $2 billion default on July 1.

It also appears to be the only kind of legislation that can pass an obscenely gridlocked Congress.

This undemocratic board would have the power to slash pensions, cut education and health care, and increase taxes on working families in Puerto Rico.
Sen. Bernie Sanders (I-Vt.)

Still, the AFL-CIO labor federation and several individual unions representing some 50,000 Puerto Rican workers oppose the bill — including the American Federation of State, County and Municipal Employees, the Service Employees International Union, and the International Association of Machinists and Aerospace Workers.

In a letter to Congress, the unions say the bill fails to “protect the accrued pension benefits of Puerto Rican workers and retirees, retain worker protections that apply to all working people in the U.S. including minimum wage and overtime protections, and preserve the democratic rights of the people of Puerto Rico.”

Roberto Pagan, president of SEIU’s 29,000-worker-strong Puerto Rico chapter, said he was concerned that five out of seven board members must vote to approve a court-supervised debt restructuring process in which a federal judge could force write-downs on creditors. (Other budgetary changes would only need four votes.)

Pagan said court-supervised restructuring would be unlikely if four people on the board are selected by congressional Republicans. (The remaining 3 seats on the board will be nominated by Democrats, and President Barack Obama will have the final say on all choices.) 

Eric LeCompte, executive director of Jubilee USA, a religious anti-poverty group and proponent of restructuring Puerto Rico’s debt, strongly endorsed the bill while acknowledging it is not “perfect.”

LeCompte argued that even the threat of court-supervised restructuring would create an incentive for parties to reach a voluntary agreement to put Puerto Rico’s debt on a sustainable path.

The bill contains other provisions that give Puerto Rico’s government more leverage over creditors, LeCompte said. He described an “innovative” clause that would require all creditors in a given bond pool to proceed with a voluntary restructuring deal if the lenders holding two-thirds of that pool’s bonds agreed to it. This would prevent a small number of holdouts from blocking a resolution, he said — something that was a problem in Argentina and other countries plagued by sovereign debt crises.

“Speaker Ryan (R-Wis.), Chairman Bishop (R-Utah) and Rep. Duffy (R-Wis.) have really strongly stood against the special interests,” LeCompte said. “It is really pretty amazing that they put the people of Puerto Rico first and a small group of creditors second.”

It is better to have nothing than this law, because it does not give any protection to the pensions of the retirees, or provide an economic growth plan.
Roberto Pagan, SEIU Puerto Rico

It’s not entirely clear what viable alternatives are available to Puerto Rico if this legislation fails.

Some progressive detractors do not even see the need for them.

“It is better to have nothing than this law, because it does not give any protection to the pensions of the retirees, or provide an economic growth plan,” Pagan said.

But the labor leader and other critics of the bill suggested a number of unconventional, end-run tactics that they could use to force bondholders to agree to more favorable restructuring terms.

Pagan said a Puerto Rican government-sponsored commission to audit the island’s debt should be allowed to complete its investigation. 

If the commission finds — as Pagan and others expect — that a significant percentage of Puerto Rico’s debt was issued illegally, the island’s government could choose to nullify that portion entirely.

Manuel Natal, a member of Puerto Rico’s House of Representatives who serves on the commission and was one of the driving forces behind its creation, believes the island would be on strong legal footing to refuse payment of illegal debt. But he argues that it would likely not be necessary.

“It is more of a negotiating strategy,” he said.

Puerto Rico may also receive relief from the Supreme Court. The high court is expected to decide in late June whether to uphold a local Puerto Rican bankruptcy law that would allow Puerto Rico to seek court-mandated restructuring on $20 billion in debt owed by its municipalities and public corporations.

That would presumably mean it could dispense with a sizable portion of its $70-billion debt burden without the need for new legislation.

Sanders, for his part, called on the Federal Reserve to use “its emergency authority to facilitate an orderly restructuring of Puerto Rico’s debt.”

“If congressional legislation fails, we could see something like that,” LeCompte ventured.

Experts on the Federal Reserve, however, say that the central bank does not have the legal authority to effectively bail out Puerto Rico.

In the end, it comes down to timing. Without fast action ahead of the July 1 debt payment deadline, Puerto Rico’s financial situation will crumble further, hurting its already-squeezed economy, health care and education systems.

“It is critical that Congress pass this as there are very significant bond payments due in July,” Treasury Secretary Jack Lew said on the sidelines of the G7 meetings in Japan on Friday morning. “It is always significant when you reach bipartisan agreement on a difficult area, but this is one where time is of the essence.”

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REVIEW
One of the most celebrated authors of his time, Oscar Wilde spent two years in jail for “gross indecency.” When given the option to flee London or go into exile in Paris, he preferred waiting for the police while dining on lobster at the discreet Cadogan Hotel. It was his lovers’ father, the Marquess of Queensbury, who in response to a libel charge Wilde made against him, who set the law upon Wilde, promising to produce innumerable young male lovers in court, which sealed Wilde’s fate. Though the Marquees son, affectionately called Bosie, Lord Alfred Douglas, several years younger than Wilde, saw no prison time.

Rupert Everett’s performance is superb, not to be missed, though a little rushed in the first act. While Mr. Everertt is a striking looking man, all angular, slim and sharp, Wilde’s oval face and soft, fleshy looks don’t match up. In an effort to make him corpulent, Everett padded his Wilde well and made him a bit sulking looking. I am not sure if it works, but Rupert Everett is so good in the role, it was a minor irritation. In all the pictures I have seen of Wilde, he never seems that stout or sulking,more large, brooding,and thoughtful.

While his friend and what seems to be his former lover, Robert Ross (Cal MacAninch) desperately urges him to run before the authorities come, the kindly servants of the hotel wait with concern; angels standing by, to handily see off their generous master to an unforgiving fate.

Bosie played by Charlie Rowe, is channeling the spirit of his character, excellent in his portrayal of this well-spoken and egotistic young man. He reflects nothing but selfishness with the nuances of humanity fading in and out like pollen to an allergic gardener.

By the second act, Wilde has been to jail and is living in Italy; penniless,and so warn down, getting up takes monumental effort. He and Bosie are living together in a shabby flat in Naples with handsome guests coming to entertain, but cash has run out… Wilde has had the life drawn out of him, Bosie is ready to abandon ship and Ross has come on behalf of Wilde’s ex-wife to take whatever is left of his fortune from writing– though that seems contradictory to the characters feelings for Wilde. For the most part, David Hare has done a wonderful job portraying these historic figures in The Judas Kiss, while Director Neil Armfield has fleshed out their frailties and strengths successfully.

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

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