Puerto Rico bankruptcy puts 2016 candidates in tough spot
THE BIG IDEA:
— Puerto Rico’s debt crisis may soon blow up into a significant 2016 issue. The island is poised to default on its crushing $72 billion debt. Its government wants to file for Chapter 9 municipal bankruptcy, following the path of cities like Detroit, but as a U.S. commonwealth it is barred from doing so. The island’s leaders are launching a campaign to get the law changed, using a mix of public pressure on 2016 candidates and a bipartisan lobbying blitz in D.C. But they face opposition from Wall Street, the Koch brothers’ political network and movement conservatives who think it smacks of a bailout.
Puertorriqueños recognize their increasing political clout, particularly in Florida, and they promise to put it to use. In an interview on Telemundo yesterday, Puerto Rico Gov. Alejandro García Padilla.
want the support of Puerto Ricans must help Puerto Rico now, not later,” he said. “Puerto Ricans decide the elections in Florida. That’s very important. By deciding the election in Florida, we can decide [who is the next] president of the United States.”
Jeb Bush endorses the bankruptcy approach. “Puerto Rico should be given the same rights as the states,” the former Florida governor said during an April visit to San Juan. He reiterated that stance last week in South Carolina and also supports making Puerto Rico the 51st state.
Other Republican candidates face pressure from the donor class to oppose it. Wall Street leaders largely oppose Chapter 9 because bondholders tend to take a bath in municipal bankruptcies. The 60 Plus Association, a key node of the Koch Brothers political network, which reportedly plans to spend upwards of $1 billion on 2016, opposes Chapter 9 as a a federal handout. Their proposed solution is creating an outside control board that would manage Puerto Rico’s debts.
Senate Democratic leaders, led by Sen. Chuck Schumer (D-N.Y.), will try attaching a provision to upcoming bills that would tweak the bankruptcy statutes for Puerto Rico. A Senate vote would force all four Senate Republicans running for president to go on the record.
Watch for Rubio to avoid taking a position until the politics become clearer. The Florida senator might be in the toughest position of anyone. He wants to appeal to tea party conservatives while also touting
himself as the Republican who is best positioned to make inroads with Latinos in a general election, especially in his home state. “Senator Rubio has been closely watching events in Puerto Rico and is concerned about the economic situation there,” spokeswoman Brooke Sammon emailed last night. “He’s in the process of reviewing the legislation to make sure it is the right approach to begin addressing Puerto Rico’s debt crisis without having any negative impact on American taxpayers.” Spokesmen for Rand Paul, Ted Cruz and Lindsey Graham did not respond to requests for comment.
In the Democratic contest, Hillary Clinton has also avoided taking a clear position. Martin O’Malley aggressively embraced the bankruptcy option last Tuesday in a play for Hispanics, and the former Maryland governor earned tons of free media in the Spanish-language press for his stance. Clinton tweeted last week that, “Puerto Rico’s debt crisis is not theirs alone. For PR’s economy to grow & their people to thrive, they need real tools & real support.” Asked if that means she supports the right to Chapter 9, a spokesman for the former secretary of State declined to comment.
Clinton is trying to raise as much as she can from Wall Street executives who already eye her skeptically because of her leftward lurch to win the nomination. But, in 2008, she beat Barack Obama in the island’s June 1 primary after both traveled there for events. The Podesta Group, run by Democratic lobbyist Tony Podesta, has earned at least $1.15 million in the past two years lobbying on the Puerto Rican government’s behalf. Tony’s brother, John, is chairman of the Clinton campaign.
WHILE YOU WERE SLEEPING:
— Greek Finance Minister Yanis Varoufakis announced his resignation after voters overwhelmingly rejected the terms of a European bailout in a national referendum. Writing on his blog, Varoufakis implied that he was not welcome at the negotiating table by European authorities: “Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.” He added: “And I shall wear the creditors’ loathing with pride.”
More than 61 percent of voters said “no” to an expired-bailout by European nations and the IMF in a Sunday referendum. “The outcome spurred popular celebrations into the night across downtown Athens and other Greek cities, but threatens to deepen the rift between Greece and the rest of Europe and push the country closer to bankruptcy and an exit from the euro,” the Wall Street Journal reports. The Eurogroup will meet Tuesday to hear new Greek proposals. The Post’s Griff White and Michael Birnbaum are on the ground.
Puerto Rico bankruptcy puts 2016 candidates in tough spot
— Puerto Rico’s debt crisis may soon blow up into a significant 2016 issue. The island is poised to default on its crushing $72 billion debt. Its government wants to file for Chapter 9 municipal bankruptcy, following the path of cities like Detroit, but as a U.S. commonwealth it is barred from doing so. The island’s leaders are launching a campaign to get the law changed, using a mix of public pressure on 2016 candidates and a bipartisan lobbying blitz in D.C. But they face opposition from Wall Street, the Koch brothers’ political network and movement conservatives who think it smacks of a bailout.
Puertorriqueños recognize their increasing political clout, particularly in Florida, and they promise to put it to use. In an interview on Telemundo yesterday, Puerto Rico Gov. Alejandro García Padilla.
want the support of Puerto Ricans must help Puerto Rico now, not later,” he said. “Puerto Ricans decide the elections in Florida. That’s very important. By deciding the election in Florida, we can decide [who is the next] president of the United States.”
Jeb Bush endorses the bankruptcy approach. “Puerto Rico should be given the same rights as the states,” the former Florida governor said during an April visit to San Juan. He reiterated that stance last week in South Carolina and also supports making Puerto Rico the 51st state.
Other Republican candidates face pressure from the donor class to oppose it. Wall Street leaders largely oppose Chapter 9 because bondholders tend to take a bath in municipal bankruptcies. The 60 Plus Association, a key node of the Koch Brothers political network, which reportedly plans to spend upwards of $1 billion on 2016, opposes Chapter 9 as a a federal handout. Their proposed solution is creating an outside control board that would manage Puerto Rico’s debts.
Senate Democratic leaders, led by Sen. Chuck Schumer (D-N.Y.), will try attaching a provision to upcoming bills that would tweak the bankruptcy statutes for Puerto Rico. A Senate vote would force all four Senate Republicans running for president to go on the record.
Watch for Rubio to avoid taking a position until the politics become clearer. The Florida senator might be in the toughest position of anyone. He wants to appeal to tea party conservatives while also touting
himself as the Republican who is best positioned to make inroads with Latinos in a general election, especially in his home state. “Senator Rubio has been closely watching events in Puerto Rico and is concerned about the economic situation there,” spokeswoman Brooke Sammon emailed last night. “He’s in the process of reviewing the legislation to make sure it is the right approach to begin addressing Puerto Rico’s debt crisis without having any negative impact on American taxpayers.” Spokesmen for Rand Paul, Ted Cruz and Lindsey Graham did not respond to requests for comment.
In the Democratic contest, Hillary Clinton has also avoided taking a clear position. Martin O’Malley aggressively embraced the bankruptcy option last Tuesday in a play for Hispanics, and the former Maryland governor earned tons of free media in the Spanish-language press for his stance. Clinton tweeted last week that, “Puerto Rico’s debt crisis is not theirs alone. For PR’s economy to grow & their people to thrive, they need real tools & real support.” Asked if that means she supports the right to Chapter 9, a spokesman for the former secretary of State declined to comment.
Clinton is trying to raise as much as she can from Wall Street executives who already eye her skeptically because of her leftward lurch to win the nomination. But, in 2008, she beat Barack Obama in the island’s June 1 primary after both traveled there for events. The Podesta Group, run by Democratic lobbyist Tony Podesta, has earned at least $1.15 million in the past two years lobbying on the Puerto Rican government’s behalf. Tony’s brother, John, is chairman of the Clinton campaign.
WHILE YOU WERE SLEEPING:
— Greek Finance Minister Yanis Varoufakis announced his resignation after voters overwhelmingly rejected the terms of a European bailout in a national referendum. Writing on his blog, Varoufakis implied that he was not welcome at the negotiating table by European authorities: “Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.” He added: “And I shall wear the creditors’ loathing with pride.”
More than 61 percent of voters said “no” to an expired-bailout by European nations and the IMF in a Sunday referendum. “The outcome spurred popular celebrations into the night across downtown Athens and other Greek cities, but threatens to deepen the rift between Greece and the rest of Europe and push the country closer to bankruptcy and an exit from the euro,” the Wall Street Journal reports. The Eurogroup will meet Tuesday to hear new Greek proposals. The Post’s Griff White and Michael Birnbaum are on the ground.
Puerto Rico bankruptcy puts 2016 candidates in tough spot
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