Americans and the media were consumed with the latest developments in the presidential election.
It was the perfect time for Paul Ryan and Barack Obama to collaborate on another Big Government scheme.
With no one paying attention, Obama and Ryan worked together to ram a $73 billion bailout of Puerto Rico through the House of Representatives.
In a victory for both Speaker Paul Ryan and the White House, the House of Representatives Thursday passed a bill to resolve Puerto Rico’s $73 billion debt crisis, a major step toward helping the island avoid a historic default.
Support came from a mix of Republicans and Democrats, emblematic of the rare compromise struck between Congressional Republicans and the Obama administration. Ryan lent significant political capital to fixing Puerto Rico’s debt crisis during negotiations for government funding in December, pledging to move legislation to address it in the first quarter of the year.
He kept his word, if not the self-imposed deadline. The bill passed by a 297-127 vote Thursday.
And now Senate Majority Leader Mitch McConnell is pledging to take up the legislation just prior to the July 4th recess, a time many Americans will be distracted by their travel plans for the upcoming holiday.
Conservatives were outraged over the bill, which they believe placed higher priority on paying unfunded pension debts than making good on the debt owed to investors.
The Hill reports:
Rep. Raul Labrador, another Freedom Caucus member, said he could only support a bill that respects debt payment priorities written into Puerto Rico’s constitution and doesn’t prioritize payments to pensioners. He cited concerns that doing so could lead to violations of state constitutions and stifle the bond market.
“Whatever we do on Puerto Rico cannot affect our states and cannot affect the way that we’re going to respond to any fiscal crisis in the future for any of the states,” said Labrador, a member of the House Natural Resources Committee, which is handling the bill. “I think if we can get those two things, most conservatives can support a bill that gives the debt restructuring mechanism to the island of Puerto Rico.”
Freedom Caucus Chairman Jim Jordan (R-Ohio) echoed Labrador’s concerns about prioritizing pension payments over bond payments.
“If you move them up and treat them different, like they did in Detroit, then now it’s not one thing that happened in Detroit. It’s becoming a pattern…and my understanding is that is has implications for the entire bond market,” said Jordan, citing Detroit’s bankruptcy in 2014. “And that is a real concern.”
Conservatives are worried that Democrats will use this bill as a roadmap to pass legislation to bail-out states drowning in debt run up by public employee union pension schemes.
Forbes reports that the total unfunded pension debt in all the states adds up to over $3 trillion dollars.
And since public employee unions overwhelmingly fund Democrats’ campaigns, there is a clear incentive for the party to pay off their contributors with a bailout.
Conservatives were concerned Paul Ryan and Barack Obama established a precedent to do just that.
To cover their tracks, they held the vote with little fanfare while the media was focused on the back-and-forth between Donald Trump and Hillary Clinton.
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