The agreement on May 19 between House Speaker Paul D. Ryan (R-Wis.) and the Obama administration on a measure to help Puerto Rico out of its debt crisis presents an obvious and urgently needed plan for the territory, according to a Washington Post editorial on Friday. Neither House Speaker Paul Ryan nor the Treasury Department ever contemplated using federal taxpayer funds to pay off debts incurred by the island’s government, which has been justly accused of taking a bad economy and making it worse through mismanagement and, in some cases, corruption, according to the editorial. Creditors may be bought out at a discount, giving Puerto Rico financial breathing room, in return for which the island will have to make structural reforms so it can meet reduced obligations and restart growth. Legislation to make this possible has been crafted pursuant to Congress’s constitutional authority to make laws for the territories, thus debunking another of the opponents’ claims: that a bill would set a debt-escape precedent for fiscally irresponsible states. The bill would also put a temporary halt to lawsuits by creditors and put an oversight board, appointed on a bipartisan basis by Congress and the president, in charge of Puerto Rico’s finances.
