WASHINGTON – U.S. President Barack Obama on Thursday signed the so-called “Promesa” law establishing a route for restructuring Puerto Rico’s $70 billion debt, as well as forming a fiscal control board to deal with the island’s financial problems.
The president signed the legislation in the Oval Office just one day before the Friday deadline for Puerto Rico to make its next debt payment of $2 billion.
“It is an important first step on the path of creating more stability, better services and greater prosperity over the long term for the people of Puerto Rico,” said Obama, while acknowledging that there is still more work to do.
Attending the signing was Treasury Secretary Jack Lew.
Obama said that the law is not “perfect” but it does move in the right direction and gives Puerto Rico the chance both to resolve the uncertainty regarding its debt and to begin growing economically again.
The president noted that Puerto Ricans have suffered one of the worst financial and fiscal crises in memory.
He said that because of the U.S. commonwealth’s inability to restructure its debt hospitals and ambulance services had become unable to operate, basic services had been suspended and government workers had not been paid.
He promised to keep working to make Puerto Rico’s economy sustainable over the long term and emphasized that his administration is committed to providing Puerto Ricans with the help they need.
Under the new law, the fiscal supervisory board may annul any law passed by the island’s government that it deems to be in violation of “Promesa,” and it may force local authorities to sell assets, merge agencies and lay off government workers to keep costs under control.
For these and other reasons, some senators, including Democrat Robert Menendez and independent Bernie Sanders, have called the law “colonialist” and “interventionist” and have opposed it.