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Special Interests Fact Check

June 7, 2016 | House Committee on Natural Resources Press Office
Who do you trust more? The former Senior Director at Moody’s Analytics or hedge fund lobbyist Connie Mack?
Financial experts and market analysts have praised the PROMESA framework and exposed the remaining "dubious" arguments peddled by special interests. As the House prepares for consideration of H.R. 5278 later this week, this fact-check is another handy reference guide to help navigate the debate.

Marc Joffe, Principal Consultant at Public Sector Credit Solutions and former Senior Director at Moody’s Analytics:
  • "[W]hen it comes to opposing PROMESA, the cause is dubious at best. As the bill comes to the floor, conservatives should ask themselves whether there is a principle worth fighting for, or whether special interests have fooled them into defending cronyism." (6/2/16)
  • "[I]f PROMESA is faithful to the Constitution, doesn't cost the taxpayer's money and won't disrupt the municipal bond market in the fifty states, exactly what conservative principle is violated by this measure?" (6/2/16)
  • "Those who came to Washington to offer a principled defense of the public purse and the Constitution should not be misled… Conservative Republicans should get behind PROMESA when it reaches the house floor." (6/2/16)
Simon Johnson, MIT professor and former chief economist at the International Monetary Fund, and Mark A. Cymrot, international arbitration litigator:
  • "If opponents succeed in killing the bill — or even just delaying it for a couple of months — it’s not only the 3.5 million U.S. citizens living in Puerto Rico who will be hurt. The ensuing void and uncertainty would also mean that most of Puerto Rico’s creditors will suffer as well." (5/24/16)
  • "The newly proposed legislation would establish a more orderly process. Public finance in Puerto Rico would remain in the hands of elected officials but now subject to strict scrutiny by an independent oversight board..." (5/24/16)
  • "Puerto Rico’s residents and most bondholders really need the same simple thing: economic growth. That will come quickest if a version of the proposed bill becomes law. But if a small group of creditors succeeds in blocking its passage, the negative consequences for Puerto Rico — and most bondholders — will be felt for years to come." (5/24/16)
Douglas Holtz-Eakin, former Chief Economist of the President’s Council of Economic Advisers and former Director of the Congressional Budget Office: 
  • "If Congress does not act soon, the problems will get worse and may ultimately require a large infusion of taxpayer money." (5/9/16)
  • "Fortunately, the House of Representatives is beginning to consider a bill that addresses these…problems. It has ways to reduce the debt burden that respect the order of creditors…" (5/9/16)
  • "It has a strong control board to rationalize the budget and bring revenues and spending into line, and it has pro-growth measures to help the economy prosper. It’s not a bailout..." (5/9/16
David Hammer, Sean McCarthy and Libby Cantrill of Pacific Investment Management Company: 
  • "In our view, PROMESA represents a responsible framework for managing the unavoidable restructuring of Puerto Rico’s debt and other liabilities. We expect no contagion to the broader municipal market from PROMESA. More specifically, PROMESA will not trigger higher borrowing costs for states or municipalities." (4/26/16)
Kenneth E. Bentsen, President and CEO, Asset Management Group, Securities Industry and Financial Markets Association:
  • "We believe that the combination of the establishment of a federal oversight board and a restructuring framework that is based on the Territorial Clause of the U.S. Constitution, will create a comprehensive solution to aid Puerto Rico’s economic recovery, improve the island’s financial position, and prevent Puerto Rico’s situation from leading to higher permanent borrowing costs for other municipal issuers." (4/21/16)
Click HERE to view the full list of PROMESA support groups and additional outside commentary.
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