Group Warns Ryan Over Puerto Rico Debt Precedent

The president of a conservative policy group this week warned Speaker Paul Ryan (R-Wis.) against allowing the House to approve a debt-restructuring plan for Puerto Rico because of the precedent it would set under U.S. bankruptcy law.

Jeffrey Mazzella, the president of the Alexandria-based Center for Individual Freedom, said in a Feb. 11 letter that approving a restructuring plan “would circumvent nearly a century of established bankruptcy law by giving the island far broader restructuring capabilities than are available to states, and by taking the restructuring process out of the experienced hands of the federal courts and handing it to unelected Washington bureaucrats.”

“In granting the island this bailout, lawmakers would be sending a clear and decisive message to profligate states that refuse to balance their budgets: Fiscal reform is unimportant, because when push comes to shove, Congress will rewrite the rules to give you a free pass,” Mazzella wrote.

Ryan has pledged to bring up a bill to resolve Puerto Rico’s debt crisis before the end of March, but has not specified what exact solution he prefers. The House Natural Resources Committee is currently in the process of reviewing policy proposals and coming up with legislation on the issue.

Ryan Rainey

Group Warns Ryan Over Puerto Rico Debt Precedent