White House to announce members of Puerto Rico control board

Andrew Cummings
August 31, 2016

The White House announced its selections Wednesday for the seven-member board that will be given the task of resolving Puerto Rico's debt crisis.

The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), signed into law by President Obama in June, provides Puerto Rico with critical tools to address its fiscal crisis.

White House to announce members of Puerto Rico control board

The White House said the seven members of the Financial Oversight and Management Board would be charged with helping the government of the United States territory restructure its $70 billion in debts and restore economic growth after a decade of recession. It will also oversee the US territory's development of a new fiscal plan to bring the island out of its financial woes.

Amid fears the FOMB would be insensitive to the social needs of Puerto Rico, where the collapsing economy has increased poverty and sent hundreds of thousands of natives to the U.S. mainland for jobs, four of the White House appointees have Puerto Rican roots.

Rather than paying anything to the defaulted bondholders, Puerto Rico's Governor Alejandro Garcia Padilla increased the island's annual cash contribution to the pension plans in July to $747.3 million, up from about $400 million in 2015.

The Republican-sponsored appointees include Carlos Garcia, a private-equity executive who previously served as president of the Puerto Rico Government Development Bank; Jose Carrion III, the president of an insurance brokerage based in San Juan, Puerto Rico; Andrew Biggs, a fellow at the American Enterprise Institute in Washington; and David Skeel, a law professor at the University of Pennsylvania.

The board must elect a chair, hire staff and open an office within 30 days. As a result of this law, Puerto Rico has access to a restructuring process to adjust its debts to a sustainable level, with no carve outs for powerful financial interests. Thousands have fled the territory for the US mainland as businesses on the island have closed, schools have struggled with limited electricity and hospitals have asked for cash payment in advance for some medication.

"Drawing from a wide variety of practical experiences and policy prowess, the members have what it takes to serve Puerto Rico and help get the territory on a path to fiscal health", Ryan said in a statement.

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