This week a horrible deal perpetrated by Speaker Paul Ryan went through the House regarding Puerto Rico and a bailout.
Rep. Dave Brat, a member of the Budget Committee and the House Freedom Caucus who defeated House Whip Eric Cantor, wrote an op ed against it in the Washington Examiner.
He explains his objections. Here it is:
The PROMESA Act creates an unelected, unaccountable “control board” imposed by Congress to manage Puerto Rico’s spending and tax policies for at least five years. Control boards and five-year plans, channeling Stalin: What could go wrong?
PROMESA deprives the Puerto Rican people of their right to self-governance and establishes a seven-person board that can overrule the Commonwealth’s elected leaders on any law. Six of the seven people on the control board will be personally chosen by President Obama to manage the territory’s spending and tax policies.
“Under the new law, the fiscal oversight board could override any act or law by the Puerto Rican government that it deems to violate PROMESA. It can also force the government to sell assets, merge agencies and lay off government employees,” reports The Hill.
“This bill deprives the people of Puerto Rico of their self-government and thereby tramples upon their right to vote, which the Supreme Court of the United States has recognized as constitutionally protected,” wrote the 12-year governor of Puerto Rico, Rafael Hernandez Colon.
Supporters of this bill are “asking Congress to respect the Puerto Rico Constitution regarding the payment of bonds, but to violate the Puerto Rico Constitution regarding home rule by establishing a federal control board and regarding pension payments by disallowing their constitutional protection,” The Hill reports.
When government curtails the rights of the individual in buying and selling decisions, it limits a fundamental human right. Friedrich von Hayek, the Austrian economist and House Speaker Paul Ryan’s guiding light, said, “You cannot have political freedom without economic freedom.”
Conservatives stand for local, accountable government, but PROMESA takes power away from the people of Puerto Rico and hands it over to an unaccountable and unelected “control board.” What happened to consent of the governed?
In stark contrast to conservative principles, dictator Joseph Stalin tasked a centralized state-planning committee to make five-year economic plans for the Soviet Union, saying that the country needed a “revolution from above” in order to bring about his economic goals.
This isn’t to say that Congress has been blameless with regards to Puerto Rico. In fact, Congress had a hand in creating some of Puerto Rico’s problems.
In 1982, due to its status as a territory, it was mysteriously written out of Chapter 9 of the bankruptcy code. It was also the victim of bad tax policy in 1996, when President Clinton signed a law phasing out section 936 of the tax code over a 10-year window.
“Without section 936, Puerto Rican subsidiaries of U.S. businesses were subject to the same worldwide corporate income tax as any other foreign subsidiary,” writes the Center for Tax Policy.
With these past congressional blunders, some argue that the control board is the only way for the island to regain fiscal health, saying that central planning is not a bailout, and that taking action now will prevent dire consequences in the future. The great economist Dr. Ludwig von Mises wrote that, “The alternative is not plan or no plan. The question is whose planning? … It is freedom versus government omnipotence.”
The PROMESA Act claims the constitutional authority for setting up this unaccountable, unelected control board because Puerto Rico is a “territory” and thus not subject to the same rights and privileges as a state.
But as Hernandez Colon points out, the invocation of its status as a territory to overrule its democratically elected leaders harkens back to discredited racism; “unrepentant colonialism is not the way to help the people of Puerto Rico.”
Furthermore, Federalist Paper No. 43, written by the father of the Constitution himself, James Madison, is clear that the territory clause in Article IV of the Constitution applied to the western territories that lacked a recognized form of governance. Puerto Rico has a well-established system of government and isn’t claimed as part of any state, so the rationale for the original territory power does not apply here.
In addition, the current governor of Puerto Rico, Alejandro Garcia Padilla, also believes that the seven-member board will undermine citizens’ rights, saying that “the board’s provisions do not meet [the democratic] obligation.”
Nonetheless, members of the House of Representatives will vote whether to impose a system for “bankruptcy” without a referendum asking the people of Puerto Rico whether they want this. Their right to democracy is not only infringed by this bill, it is entirely usurped.
This makes the bill truly Orwellian — it removes the consent of the Puerto Rican people and creates a fiefdom for unelected officials chosen by President Obama.
With people on both sides of the aisle voicing serious concerns about this bill, it seems the only people that are in favor of PROMESA are D.C. insiders.
As economist Thomas Sowell said, “The fatal attraction of government is that it allows busybodies to impose decisions on others without paying any price themselves.” Congress can’t even get its own fiscal house in order, but has a bill to solve Puerto Rico’s problems.
This bill should be subject to ratification by the Puerto Rican legislature or a vote from the Puerto Rican people. As it stands, I will oppose PROMESA because it turns free citizens into subjects.