(Center for Individual Freedom) – The Center for Individual Freedom released Tuesday a new television ad warning about the dangerous precedent Congress would be setting by passing the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), legislation currently being considered by the House Committee on Natural Resources, in its current form.
As Congress continues to debate legislation to address Puerto Rico’s financial crisis, CFIF’s new ad warns savers and seniors across America, as well as lawmakers, to be wary of the domino effect that could result should Congress pass the current version of PROMESA, which would provide “Super Chapter 9 Bankruptcy” provisions for the Commonwealth.
“After years of reckless spending, Puerto Rico is out of money. Now savers and seniors could pay the price,” CFIF’s ad begins. The ad goes on to point out that high-spending states like Illinois, New Jersey, and California collectively owe trillions of dollars in debt. If Congress changes the rules to retroactively enable Puerto Rico itself to renege on its constitutionally prioritized “full faith and credit” debt, Congress would be establishing a political precedent to do the same for those financially troubled states and others in the future.
“Puerto Rico is just the first domino to fall… Tell Congress: No ‘Super Chapter 9 Bankruptcy’ for Puerto Rico,” the ad concludes.
This ad is the most recent in CFIF’s ongoing education campaign regarding Puerto Rico’s debt crisis and legislation regarding the issue. In its current form, the PROMESA “Super Chapter 9” bill undermines the rule of law, threatens the property rights of the Commonwealth’s bondholders, increases moral hazard and sets a dangerous precedent for high-spending, financially distressed states that will expect similar rescue measures from Congress moving forward.