Labrador lays out Puerto Rico bill priorities for House Conservatives

Morning Consult has Raul Labrador’s (R) position on HR 4900, or PROMESA, the United State House of Representatives bill aimed at helping Puerto Rico with its current debt crisis. Labrador spoke on behalf of the House Freedom Caucus.

“Whatever we do on Puerto Rico cannot affect our states and cannot affect the way that we’re going to respond to any fiscal crisis in the future for any of the states,” Labrador, a member of the conservative House Freedom Caucus, told reporters today.

He also rejected complaints from some general obligation bondholders that they be exempt from some of the debt restructuring processes set out in the bill, H.R. 4900.

“I don’t think that’s right,” he said. “If you read the Puerto Rico constitution, it specifically says that general obligation bonds need to have priority up to 15 percent of the debt of the island. We need to make sure we protect that. Because if we don’t protect that, our state constitutions are not going to be protected.”

Labrador said the other priority for conservatives is to ensure that a restructuring process doesn’t emulate the kind of process witnessed when Detroit declared bankruptcy, especially when it comes to prioritizing payments to pensioners versus creditors.

Unfortunately for Puerto Rico, as encouraging as this statement may seem, the truth is not even Labrador represents the problem for HR 4900. Several Republicans are working to prevent the bill from having any sort of debt restructuring. And we now know nothing is happening in time to avoid a default on the May 1 payment.