Press Releases

Virgin Islands Congresswoman Stacey Plaskett released the following statement on the introduction of H.R. 5278 in the U.S. House of Representatives this week:

"Late Wednesday night, Congress introduced another version of legislation that will enable Puerto Rico to restructure its debt. While the new bill (H.R. 5278) represents a significant step forward toward ensuring the Puerto Rican government can continue to provide essential services, it still contains provisions that are concerning to the interest of the U.S. Virgin Islands.

The best changes to the bill include creating a level payment of the retirees’ debt along with Wall Street debt and allowing the Oversight Board to be appointed by the President.  The current bill still contains a provision to remove a minimum wage (but now allows that to be at the discretion of the Governor).  The new bill, however, still proposes to create an oversight board with very broad powers over the Puerto Rican government, which will have enormous power over the people of Puerto Rico. It can quash legislation, regulations or administrative action it believes is not in the fiduciary best interest of Puerto Rico and its debtors. It also contains the same provision that was proposed in an earlier version of the bill, allowing the other Insular territories the option of electing to have the same oversight board preside over their respective local governments.

The bill mentions nothing about Medicaid, or any other tax relief, nor does it provide any other recommended economic growth options that will allow meaningful growth, as recommended in the White House road map for Congressional action to address the Puerto Rico debt crisis introduced earlier this year. The bill deals only with the mechanism for Puerto Rico’s restructuring of its debt.

In the past, the bond market has taken into account the fact that bankruptcy is not an option for Territories as a legal security positive fact and it was factored into bondholders’ investment decisions.

In the future, if the language in this bill remains, the Virgin Islands can expect some investors to have apprehensions when considering whether or not to purchase Virgin Islands bonds, because of this new option to adjust debts. Because of the increased risk to investors, another ramification may be that some borrowing might become significantly more expensive in the form of higher interest rates, which in turn will mean higher cost to the territory to borrow.

I am still of the belief the best solution is passing legislation which focuses more on better equipping the territories with the mechanisms to grow their own economies rather than allowing bankruptcy protections and imposing oversight boards.

I believe the provisions in this legislation to be detrimental to the advancement of the Virgin Islands economy. Despite many of our concerns about transparency and fiscal responsibility, the draconian oversight of this proposed Board opens the door to neo-colonialism, not mature self-government. I believe it is bad for our territory and I will continue to oppose it in its current form. I will also continue to press for the development and creation of true economic growth opportunities. To be absolutely clear, to the people of the territory, this is not a bail out for Puerto Rico, this bill is merely about helping creditors get paid and denying Puerto Rico the tools recommended by the President to grow it and other territories economy.  Congress should be focused on the creation of real and true economic development and opportunity for all residents."

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