WASHINGTON - Suggestions for handling Puerto Rico's fiscal crisis continue to circulate in Congress as both houses prepare to return from recess Tuesday.
One source familiar with Puerto Rico discussions said that draft legislation is being floated to create a federal control board that would be charged with overseeing the commonwealth's finances. If introduced, that legislation would join two currently stagnant bills sponsored by Democrats that would extend Chapter 9 bankruptcy authority to Puerto Rico's municipalities.
Representative Jeff Duncan, R-S.C., was the first person to propose a federal control board over the troubled commonwealth, though staff in Duncan's office contacted for this article said he was not working on the draft legislation.
In June, Duncan circulated a "Dear Colleague" letter detailing the issues Puerto Rico was facing at the time and denouncing the Chapter 9 approach, calling it "a financial bailout of Puerto Rican debt that [would] provide only temporary benefit."
"I believe legislation to require the establishment of a financial control board, to enable the politically unpalatable changes necessary to put Puerto Rico back on the road to self-determination, may be needed," Duncan said at the time.
He said the approach has been successful, citing the control board imposed on the District of Columbia in the mid-1990's. Duncan said Congress could impose a similar board under Article 4 Section 3 of the Constitution, which obligates Congress to make "needful rules and regulations" for U.S. territories.
The two Chapter 9 bills have met Republican opposition and have not moved from their respective committees after being referred there.
They would extend Chapter 9 bankruptcy powers to municipalities in Puerto Rico, which are excluded from that relief under federal law. The Obama administration and several presidential candidates, including Hillary Clinton and Jeb Bush, have expressed support for a Chapter 9 solution.
Not all candidates share that view. Sen. Marco Rubio, R- Fla., in a Friday op-ed preceding a campaign stop in Puerto Rico, said he would only support extending Chapter 9 as a measure of last resort after Puerto Rico took "significant steps" to fix "its budget and economic mess."
He blamed the island's current $72 billion debt on "Puerto Rico's liberal-leaning politicians" who have "lacked the political courage and competence to pull Puerto Rico out of economic despair."
